Austin IPO candidate Rules-Based Medicine obtains $3M cancer research grant
As it ramps up for an IPO, Austin biotech company Rules-Based Medicine Inc. has boosted its bottom line.
Rules-Based Medicine, which specializes in molecular diagnostic tests, just received a $3 million research grant from the Austin-based Cancer Prevention and Research Institute of Texas.
Citing its pending IPO, Rules-Based Medicine spokeswoman Nadine Padilla says that “while we strive to be forthcoming to the fullest extent possible,” the company isn’t at liberty to respond to most of the questions posed by AustInnovation™ about the $3 million grant.
For now, Rules-Based Medicine is concentrating primarily on VeriPsych, the first and only blood test to help diagnose schizophrenia. However, the company says it’s also working on diagnostic tests for cancer and other diseases.
In 2008, Rules-Based Medicine received a $1.15 million contract from the National Cancer Institute to research diagnostic tests for ovarian cancer.
“An early diagnostic screen for ovarian cancer could greatly increase the chances of survival,” Craig Benson, president and CEO of Rules-Based Medicine, said at the time.
Rules-Based Medicine employs more than 120 people in Austin; Lake Placid, N.Y.; and Reutlingen, Germany. The company also is majority owner of Psynova Neurotech Ltd., based in Cambridge, England.
Austin-based Luminex Corp. spun off Rules-Based Medicine in 2002. Rules-Based Medicine was established in 1998 as a research and development project within Luminex, which develops biological testing technologies.
Rules-Based Medicine raised $25 million in venture capital in 2007 from Equity Group Investments LLC, co-founded by billionaire Sam Zell; Cross Creek Capital, the venture capital arm of Wasatch Advisors Inc.; and Stephens Capital Partners, the merchant banking affiliate of Stephens Inc.
In December, Rules-Based Medicine filed for an IPO that then was valued at $90 million. Last year, the company collected more than $24 million in revenue, yet its operating expenses totaled nearly $23 million. About 80 percent of the company’s revenue currently comes from laboratory testing services.
In a filing last month with the U.S. Securities and Exchange Commission, Rules-Based Medicine says the ability to identify and measure biomarkers “will become increasingly important in both medicine and pharmaceutical research and development.” Referring to published reports, Rules-Based Medicine says the global molecular diagnostics market is expected to reach $3.7 billion this year and $6.4 billion by 2015.
Biomarkers are proteins detected in blood that can signify the presence or severity of diseases.
Most diseases and drug effects manifest themselves in abnormal levels of certain biomarkers found in peripheral blood, which flows through the body’s extremities. Use of Rules-Based Medicine’s biomarker testing services can pinpoint the positive and negative effects of drugs during preclinical research and clinical trials.
“Biomarker testing results identify patients most likely to respond to a given therapy and the biochemical reason for that response, making clinical trials more successful and effective,” Rules-Based Medicine says.