DiaGene finds seed funding for HIV resistance test product

A University of Basel spinoff, DiaGene makes resistance tests for viral diseases. DiaGene

When HIV patients begin to develop a resistance to the cocktail of drugs treating their disease, this startup's test helps to advise doctors which inhibitor combination to use and which to avoid.

In trade publications, researchers report that some patients receiving treatment for HIV have developed a resistance to one or even several drugs being used. Doctors are being encouraged by their advisory associations to monitor resistance. One way to do that is to use “replicative phenotyping test”.

DiaGene, a University of Basel spinoff company, is one of a handful of companies worldwide in a position to commercialize a diagnostic assays that can do a direct “phenotyping” of viral diseases.

Its assay is a “second generation” test. Such tests measure the survival and growth rate of sample viruses from a patient when exposed to a particular drug or set of drugs. If the sample produces color (by an engineered “reporter” that indicates virus growth), it is resistant to the medication.

Because HIV treatment tends to be centralized across various regions in Europe, marketing and distribution should be fairly straightforward for the young company, but DiaGene will not be selling the test system to laboratories or treatment centers.

Instead, it will be offering testing as a service, according to Dr Thomas Klimkait, Head of Molecular Diagnostics, Institute for Medical Microbiology, University of Basel, who works as consultant for the startup company.

Dr Klimkait told Swiss Venture that the administration is complex and for the time being the testing will be done by DiaGene.

Testing not limited to HIV resistance

DiaGene says it will also sell the test to pharmaceutical companies involved in HIV drug development in Europe for the profiling of new HIV inhibitors and to drug-specifically monitor performance of their drugs.

Eventually DiaGene’s PhenoTect platform could be deployed to other testing centers interested in offering such testing as a service.

The future growth of DiaGene is based on developing a range of tests for other viruses.

DiaGene investor, Dr. Jost Harr of the ErfindungsVerwertung AG, which provided seed funding along with other investors, told Swiss Venture Update that DiaGene is expected to expand its product range to include resistance tests for other major viral diseases such as Hepatitis B and C.

Potential to save money

According to a number of articles in the Journals of the American Medical Association, resistance testing of viruses is costly. But first studies of clinical cost calculations for HIV-patients show that proper implementation of treatment would reduce costs and may prompt more appropriate choices in therapy.

Other privately owned companies in the field include, Belgian Virco Group NV, which is selling a phenotyping test and was acquired by Johnson & Johnson in 2002, as well as ViroLogic, a US based firm, which recently announced an alliance with Pfizer on resistance testing.

Resistance testing, including the phenotyping test PhenoTect, is currently in the approval phase at the Swiss Department of Social Insurance, which covers health insurance. If it approves the test, then doctors will be able to invoice the health insurance companies for the cost of doing the tests.

Funding secured

The young company raised a total of SFr 1 million seed capital from a number of investors, including the ErfindungsVerwertung AG, an investment company.

Further capital requirements are not urgent the principles told Swiss Venture.

Unlike a biotechnology drug development company, diagnostics companies start to generate revenues earlier.

The startup employs 7 people with plans to hire 3 more by the end of the year. It is a spinoff of the University of Basel and it received help from the technology transfer office there, known as the WTT Wissens und Technologietransfer Stelle, to prepare to spin off the research.

The WTT has helped register 20 patents and expedited the emergence of 12 startups, including NanoSurf, Myocontract Pharmaceuticals, and Canoo Engineering, three growing high tech firms.

by Valerie Thompson