09 Apr 2012
Planned two-stage investment from Merck Global Health Innovation Fund for development of automated image analysis.
Medical imaging specialist VirtualScopics has signed a deal that should see up to $6 million invested into developing the Rochester-based company’s automated image analysis technology.
The firm, founded in 2000 and listed on the Nasdaq stock exchange, is planning to enter the emerging market for personalized medicine with the new funding. Under the terms of its agreement with Merck’s Global Health Innovation Fund, $3 million will go towards commercializing a “quantitative imaging center” over the next twelve months, with a further $3 million promised if development progresses as is hoped.
The VirtualScopics technology involves automated, quantitative analysis of images produced by CT and MRI scans – for example measuring objectively the size of tumors, and tracking how the size changes with time following treatment.
Currently, the approach is used in clinical studies, for example to monitor drug efficacy. But the company wants to extend that range of application. “Through this investment, the company intends to bring quantitative imaging to individual physicians and patients, and believes it will have a significant impact in the personalization of medicine, and in certain therapeutic areas that offer the potential for early diagnosis,” said VirtualScopics in a statement announcing the new funding.
The injection of cash will be used to validate the application of the approach for blood perfusion and oncology studies, and also to establish a new analysis platform aimed at diagnostics and personalized medicine.
CEO Jeff Markin said of the agreement: “This investment is a key enabler to our goal of applying our technology into the personalized medicine market. We believe our image-based software applications will play a critical role in assisting physicians with an earlier determination of response to therapy and ultimately help us achieve our mission of improving the lives of people across the globe that suffer from life-threatening or debilitating diseases.”
Last year, VirtualScopics posted sales of $14.3 million, a 7% year-on-year increase, but saw operating profits shrink from $0.9 million to breakeven, after costs, including R&D, increased.
According to chief business and financial officer Molly Henderson, the $5.7 million in cash held by the company prior to the latest Merck investment will allow VirtualScopics to expand its range of applications, while she also said that the company is in discussions with the US Food & Administration (FDA) over the initial 510(k) approval of its first products for personalized medicine.