MOFFETT FIELD, Calif., Oct. 22, 2002 — BioLuminate Inc. got its initial funding via a 3×5 card posted in a bathroom. Now the company looks flush with potential.
BioLuminate has developed a new way of diagnosing breast cancer, using a technology licensed from NASA’s Ames Research Center, based here, and two other government labs.
Currently, diagnosing breast cancer involves extracting golfball-sized hunks of breast tissue through core needles the size of a small straw. The method offers an 85 percent accuracy rate. BioLuminate’s Smart Probe is a needle one-third the size of a core needle that uses several kinds of sensors to measure lesions for cancerous cells.
BioLuminate’s probe extracts no tissue and promises accuracy rates near the 98 percent level achieved by a full biopsy. The probe uses four types of sensors — infrared laser, white light, blue laser and electrical, to determine whether cancer cells exist — and will report data in real time. Tests of the probe are under way at the University of California, Davis, Medical Center. Only 14 patients have been tested, so results are statistically insignificant, but so far it has a 100 percent accuracy rate.
“What’s amazing is it’s nonintrusive,” said John A. Fraser, director of technology transfer at Florida State University in Tallahassee. FSU developed the synthesis process for Taxol, a breast cancer medication by Bristol-Myers Squibb Co.
Fraser sees two big market upsides for the Smart Probe: “It helps with the ‘fear factor’ faced by women who go in for a biopsy. This technology tells them their results immediately. Also, at some point insurance groups should become interested in the cost reduction it provides.”
BioLuminate expects to sell the Smart Probe for $250, and the test should cost less than $1,000, up to 80 percent less than surgical tests. The company projects revenues of $287 million in 2007. Another possible market for BioLuminate would be diagnosing prostate cancer.
The base patent comes from a probe technology NASA developed to test for life on Mars. Other technology in the Smart Probe comes from Los Alamos National Laboratory and Lawrence Livermore National Laboratory.
Richard Hular, BioLuminate’s chief executive and president, was a presenter at the recent Global NanoSIG Conference here at NASA Ames. The company was there to show how NASA’s research offers commercial potential, said Meyya Meyyappan, director of the NASA Ames Center for Nanotechnology.
Meyyappan said that BioLuminate’s technology isn’t nanotech, even though Hular called it that during his presentation. Hular later said that the product will measure about 1 micron when it becomes commercially available in two years, which still puts it in the small tech category.
Hular said 12.6 million women in the United States and Europe are tested for breast cancer annually, and 85 percent of biopsies in the country prove negative, yielding 21,000 unnecessary surgeries a week. Hular said that represents some $2.45 billion annually.
Hular found his initial investor through unusual means. He put a 3×5 card on a bulletin board in the men’s room of the tony Pacific Athletic Club in Redwood City, Calif. Two days later, he got a call and ultimately, “I raised $1.2 million in two months,” including a check from former Sen. Bob Dole. BioLuminate’s total funding to date is $4.2 million, all from angel investors.
He may want to dust off that card again. Hular says he’s having trouble raising more money. He does have $3.5 million of a second round committed, at a premoney valuation of $32 million, but seeks another $5 million and a lead investor for the round. He also thinks the company will need another $18 million in 12 to 15 months.
Hular said BioLuminate, a six-employee firm in Dublin, Calif., needs funding to keep it going during the 150-patient trial at UC Davis, and a larger, 1,000-patient study that will take place at the University of California at San Francisco and other hospitals. Those trials will give it the data it will need for FDA approval. Hular also expects the company to tweak its design as trials proceed.
One interested investor might be Steve Jurvetson of Draper Fisher Jurvetson. Jurvetson and Hular were in the lunch line together at the conference and started a conversation that continued through lunch. DFJ itself does not make medical equipment investments, but its international fund has, and Jurvetson thinks BioLuminate has good potential.
“The factor of risk is the $18 million that still has to be raised,” said Jurvetson. He noted that in the current “cycle of doom” mentality present in Silicon Valley, VCs are chary of seeing investments wiped out in a follow-on round.
Some think BioLuminate should forego a follow-on round, and maybe even stop raising funds entirely.
“He could have revenue right now” by going to overseas markets, said Pascal Noronha, chair of the nanoSIG for nanoMaterials and Manufacturing. “Why dilute his share?”