A Raleigh startup developing precision diagnostics for gastrointestinal diseases has raised $18.9 million.
The funding will support Gemelli Biotech, which has launched two products since its formation in 2018, to scale its operations.
Gemelli raised the funds in equity from 121 investors, according to a June 8 filing with the U.S. Securities and Exchange Commission. The company could still raise another $1.1 million for a total near $20 million. The total amount raised includes about $5.9 million of cancelation of indebtedness and a little more than $13 million of new cash, according to the filing.
The formation of the company can be traced back to Gemelli CEO Matt Mitcho's time at Salix Pharmaceuticals, where he helped run commercial operations. During that time, he worked closely with Dr. Mark Pimentel, a physician with Cedars-Sinai, a nonprofit academic health care organization in Los Angeles, that developed assets for Salix.
A few years after Valeant Pharmaceuticals International acquired Salix, Pimentel, reached out to Mitcho about setting up a company to help commercialize assets he developed. The company was formed in summer 2018 with exclusive licenses for two technologies from Cedars-Sinai, where Pimentel is the director of the Medically Associated Science and Technology Program.
With these licenses, the company has released two products intended to help physicians better treat their patients. Gemelli launched in 2018 a blood test called ibs-smart that measures the levels of two antibodies that are known to be elevated in patients with post-infectious irritable bowel syndrome. Two years later, the company launched a breath test called trio-smart that measures hydrogen, methane and hydrogen sulfide levels in patients after lactulose or glucose consumption.
Mitcho, who has worked in the Triangle for more than 20 years — at Salix and GlaxoSmithKline (NYSE: GSK) — said seed funding and other small investments have supported the company during its first few years. According to securities filings, the company raised about $1.9 million in 2019 and $5.5 million in 2021.
This funding has allowed Gemelli to prove its concept and commercialize assets to demonstrate their market. But now it's time to scale up operations for the company with a headcount just under 20.
Mitcho said Gemelli will use this capital to hire more sales professionals and grow its operations team and lab services. The company will be able to sell and service more tests, which ultimately leads to reaching more doctors and patients.
"We can do a lot of good for a lot of people by scaling the company," Mitcho said.
Gemelli is building out its corporate infrastructure in the Triangle while maintaining connections to the West Coast, including its lab services. The company is exploring adding lab capacity on the East and West coast, said Mitcho, whose connections to the Triangle also include an MBA from UNC-Chapel Hill's Kenan-Flagler Business School.
In addition to growing its operations, Mitcho said Gemelli could expand on its line of assets in the future as the company continues to focus on precision diagnostics in the GI space.
"We have five founders," Mitcho said, "four are physicians and then me. The focus is on the patients and the people they are seeing in their clinics every day."
Gemelli was included, along with with several Triangle companies, in a list of 10 startups to watch by the North Carolina Technology Association in November.
