The Fountain Innovation Fund is banking on the future of Lawrence-based Clara Biotech, which has developed proprietary and patented technology for the next generation of medicine.
Fairway-based Fountain Innovation Fund does not disclose the amount it invests, but its typical investment range is $75,000 to $150,000. Its investment is part of a larger seed round for Clara Biotech, which to date has raised an $850,000 seed round. Royal Street Ventures' UVF-Crossroads program provided due diligence for the local fund.
“Exosomes is defining the future of medicine, we think, and the way that Clara Biotech is approaching that space is really interestxing,” Maggie Kenefake, managing director of Fountain Innovation Fund, told the Kansas City Business Journal. “Ultimately, what they’re doing is going to lead the development of some critically needed therapeutics to treat all kinds of chronic diseases.”
Clara Biotech, which spun out from the University of Kansas via a tech transfer, developed a kit-based technique to rapidly isolate pure exosomes from blood and saliva. Cells in the body produce exosomes, which can act like stem cells but with fewer drawbacks. They can be used to detect diseases such as cancer and Alzheimer’s via small blood samples and also can be used for drug delivery and cancer immunotherapy.
Clara Biotech addresses a core industry challenge — the ability to extract specific exosome populations without getting unwanted materials.
“If you’re looking to diagnose diseases, for example identifying biomarkers of interest, it’s kind of like looking for a needle in a haystack,” Clara Biotech CEO and co-founder Jim West told KCBJ. “You have a small signal with a bunch of noise around it. When you do these (traditional) bulk isolation methods, there’s so much noise and contamination that your signal really gets drowned out. What we’re able to do is get rid of all that noise, all that nonspecific material, and really amplify the signals that people are looking for.”
In addition to Fountain Innovation Fund, the seed round has attracted notable investors, including Dr. Martin Madaus, who previously was CEO of Roche Diagnostics Corp. North America and is an executive at The Carlyle Group, and Michael Singer, a professor at Yale University and co-founder of Cartesian, HealthHonors and Topokine. Clara Biotech also recently added a new member to its board, Dr. Andrew Godwin, the director of genomic diagnostics at the University of Kansas Medical Center and a leader in the translational research and precision medicine fields.
Clara Biotech plans to use the funding to prepare its product for mass production and develop and roll out marketing strategies and sales channels.
Kenefake said Fountain Innovation Fund contacted customers and experts in biotech, who said Clara Biotech has built a best-in-class product and business model. The Lawrence company already has demonstrated traction and customer demand much earlier than most life sciences businesses, she said.
“Their growth potential is absolutely significant,” Kenefake said.
Clara Biotech has been selling its beta product to early adopters since December and now has customers in places such as Europe, Africa and Asia. Its customers include some of the world's top pharmaceutical companies, diagnostic developers and exosome researchers. Clara Biotech is working with two cancer centers on research that could lead to the ability to detect cancer in patients in the future.
“Our vision is to solve this problem around exosome isolation,” West said. “The challenges in getting the exosomes isolated has held a lot of research back, it’s kept a lot of people out of the field, and it’s keeping solutions from coming to the market. It’s our hope that we can provide a platform that anybody can leverage to get their solutions to the market in a faster way and that we can really help catalyze an exosome revolution.”
