Cambridge-based ZappRx, a mobile platform aiming to coordinate specialty pharmaceutical care between patients and healthcare providers, announced on Thursday that it has raised an additional $1 million in seed funding, led by current investor and prominent local VC firm Atlas Venture. Also joining the round was SR One, the venture arm of GlaxoSmithKline, one of the top four pharmaceutical manufacturers worldwide.
The “Uber for medicine” company plans to use the $1 million to further develop its hallmark prescription processing platform to better fit the unique needs of the specialty pharmacy space – a corner of the industry that was worth $80 billion in the United States in 2012, and is set to skyrocket 67 percent by 2015.
The new funding comes close behind the company’s initial $1 million raise in September 2013, which was also led by Atlas Venture investors’ Jean-Fransous Formula and Ryan Moore, with participation from New York City’s Life Sciences Angel Network and ed-tech entrepreneur Hakan Satiroglu, among others. The company has raised a total of $2.2 million.
“It’s great to have your current investors be jazzed by what you’re doing,” ZappRx Founder and CEO Zoe Barry shared. “Having SR One come in is huge. They’re very prestigious and tier one, and they’re really experts in the specialty space. When you start getting that level of investor and company interested, you know you’re onto something.”
ZappRx marks SR One’s first investment in the space, further testifying to the startup’s potential. Said Jens Eckstein, Managing Partner at SR One, in the release:
As an evergreen fund backed by GSK, a major manufacturer of specialty medications, we are acutely aware of the high cost associated with manually processing specialty orders. We believe ZappRx has the ability to alleviate these inefficiencies. As an investor who strongly identifies with this problem, we want to be part of the solution.
The addition of SR One to ZappRx’s investment team ushers in a new chapter of development for the startup. When BostInno first spoke to Barry, ZappRx aimed to disrupt e-prescription processing as a whole. The company has since reframed the issue to focus its efforts, beginning in the subsector in which ZappRx’s platform has the potential to make the biggest impact: specialty pharmaceuticals.
“As entrepreneurs, we’re always looking for a gigantic market but trying to find a bite-sized amount of said market to get traction on,” explained Barry.
After having to halt initial pilot plans unexpectedly in July 2013, the company plans to test the specialty market in the coming months by delivering its platform to patients and healthcare providers of Pulmonary Langerhans Histiocytosis, or PLH.
A small group of doctors – “the Elite Eight” – in the U.S. treats about 50 percent of the PLH population (Of the Elite Eight providers, “at least two are based in Boston,” divulged Barry).
A doctor has to submit upwards of 50 pages of administrative materials every month for a singular PLH patient’s prescription processing. The sheer amount of paperwork, as well as the intricacies in required recording of other health and legal information, “can mean the order isn’t processed right away, leading to lengthy delays and an incredible administrative weight that ultimately delays patients getting their supply on time,” explained the CEO.
"We want to be [patients, pharmacists and healthcare providers] Amazon one-click, or as we say, 'easier, faster, more efficient,'" added Barry in closing.
The startup currently employs six, and is looking to hire those with both “the startup bug and technical chops." The ZappRx team works out of company investor Satiroglu's coworking space Exponential at 31 St. James in Back Bay; however, they are touring around town trying to find a place of their own.
