January 25, 2006

Handylab gets capital

$6 million investment will speed portable DNA analysis to market, HandyLab says

Ann Arbor-based HandyLab Inc. says $6 million in new venture capital could propel its "lab-on-a-chip'' device into the marketplace later this year.

The company, started with technology first developed at University of Michigan, plans to unveil the handheld device by the end of the third quarter. The portable tool contains a disposable cartridge containing a microchip, which can analyze DNA from a drop of blood, and return results to doctors and patients more quickly than conventional methods.

HandyLab CEO Jeff Williams said the venture financing will help the company build up a sales and marketing team, adding up to 20 employees to its current local staff of about 30 by year's end.

The company has received $20 million in venture capital since it was founded in 2000. Venture capital is considered a high-risk, but potentially high-reward type of investment, and is a common way of funding technology companies.

The recent round of financing was lead by EDF Ventures, the largest investor in the company. Other Ann Arbor funds also contributed, including Ardesta, Arboretum Ventures and the Wolverine Fund at the University of Michigan Business School.

Williams said the financial backing should carry the company through the mandatory clinical testing for the device, which is required by the Food and Drug Administration before medical technicians can use the equipment.

The company is developing the device to diagnose strep infections, as well as sexually transmitted diseases and difficult to treat viruses that can spread pneumonia within hospitals.

For EDF Ventures, which co-founded HandyLab in 2000, the goal of seeing a product reach the market is getting closer, said Mary Campbell, the firm's general partner. The demand is also growing for less costly and faster acting lab equipment, she said.

"The big corporate players in medical diagnostics are interested in getting their hands on molecular diagnostics devices, because they see that's where the market is trending - to be able to test the DNA of the bug of choice,'' Campbell said.