BY REY MASHAYEKHI
October 22, 2021 11:00 AM PDT
It wasn’t just the investors and business partners of Theranos who were hurt by the health-tech firm’s remarkable downfall. After it emerged that the blood-testing machine the company had developed never functioned properly, an entire generation of like-minded blood-tech startups found themselves cast in Theranos’s ignominious shadow and blackballed by investors.
It’s now three years since federal authorities brought the hammer down on Theranos, spurring the company into insolvency. Former Theranos CEO Elizabeth Holmes is standing trial in federal court for fraud, while her ex-boyfriend and former Theranos president Sunny Balwani will do the same in January.
But while Theranos is still in the spotlight, it appears that biotech startups developing advancements in blood testing and analytics are finally overcoming the stigma they felt after its demise. As of early September, blood-testing startups had raised more than $200 million in funding in the previous 12 months, according to the Financial Times. That windfall came amid a bumper year for the broader realm of equipment diagnostics, where companies had raised around $6.1 billion at the end of August, according to PitchBook data cited by the FT—eclipsing their 2020 haul and nearly tripling what they had raised in 2019.
There is now no shortage of innovative biotech startups looking to push what’s possible with a blood test—and no lack of investors seeking to back them in the hunt for the next transformative medical technology. Here are some of the firms bringing fresh blood into the biotech space, and rendering Theranos a nightmarish relic of the past.
It seems unfair to compare Genalyte’s Maverick Diagnostic System to Theranos’s notorious Edison device—as the Maverick appears to actually work—but the similarities are there. Genalyte’s mini-fridge-size device uses silicon chip–based technology to perform rapid, simultaneous tests on a small blood sample. The company says it can detect dozens of different antibodies from a single drop of blood, with results in as little as 20 minutes.
The Food and Drug Administration has already approved the Maverick for select antibody tests (including coronavirus antibodies), and Genalyte is expected to submit more tests for FDA approval later this year. In the meantime, investors have flocked to the San Diego–based company; Verily, Alphabet’s life sciences division, led a $50 million funding round in January that valued Genalyte at $350 million, according to PitchBook data.
Grail’s Galleri liquid biopsy test has been hailed as a revolution in early-stage cancer screening, as it uses DNA sequencing technology to detect more than 50 different types of cancer from a blood sample. Grail began rolling out Galleri in the U.S. earlier this year—though it has yet to receive full FDA approval—while Britain’s National Health Service began trialing the test last month.
Silicon Valley–based Grail was founded in 2015 as a spinoff of Illumina, the San Diego–based trailblazer in genetic sequencing and therapy. Grail went on to raise $2 billion in funding from backers including Jeff Bezos and Bill Gates, as well as institutional investors like the Canada Pension Plan Investment Board. Last year, Illumina announced its intention to reacquire Grail in a deal valued at $8 billion; the transaction was completed in August over the objections of U.S. and EU antitrust regulators, who are now seeking to reverse the deal.
Like many of its blood-testing counterparts, Truvian has high ambitions though its aims are simple: to make blood diagnostics quicker, easier, and cheaper. The company says its compact, benchtop device would let pharmacies, doctor’s offices, and health clinics deliver test results in as little as 20 minutes with as few as five drops of blood—providing lab-caliber insights on dozens of common wellness tests, without needing to ship samples to an off-site lab. Truvian is currently seeking FDA approval of the device.
The San Diego–based startup was founded in 2015 and has raised more than $176 million in funding to date, according to PitchBook data. Its most recent round came this February, when Truvian raised $105 million in a Series C that valued it at $405 million.
Sight’s OLO device is a complete blood count (CBC) analyzer that deploys A.I. and machine-learning technology to advance what’s possible with a prick of the finger. With two drops of blood, OLO can analyze samples to conduct a CBC analysis in mere minutes, delivering lab-grade results in a fraction of the time. The device obtained FDA clearance for use in moderate complexity laboratories in 2019.
Tel Aviv–based Sight most recently raised $71 million in a Series D funding round last year that featured Koch Industries’ corporate venture capital arm among its investors. The round valued Sight at $595 million, according to PitchBook data.
By using machine learning to sequence and analyze traces of DNA in a patient’s blood, Karius’ liquid biopsy test can detect more than 1,000 pathogens from a single blood sample. That helps physicians diagnose a wide range of viral, bacterial, and fungal infectious diseases, saving lives in the process.
The Silicon Valley–based startup most recently raised $165 million in a Series B funding round in early 2020, which was notably led by SoftBank. Karius also counts the likes of Tencent, Khosla Ventures, and General Catalyst among its investors and has raised more than $254 million to date, per PitchBook data.