A Novi-based medical device company focused on better detecting breast cancer is moving toward widespread commercialization, having completed a new $30 million venture capital funding round.
Delphinus Medical Technologies Inc., a spin-out from the Barbara Ann Karmanos Cancer Institute in Detroit, is tapping into its roots and installing its newly commercialized technology called SoftVue — designed for mammography for the roughly 40 percent of women with dense breast tissue — into the cancer hospital on the Detroit Medical Center campus in the city’s Midtown neighborhood.
The installation of the SoftVue technology — which the U.S. Food and Drug Administration approved last October — comes amid the company also closing its $30 million Series D funding round earlier this month. That will serve as the engine to propel the company forward, Delphinus CEO Mark Forchette said, with plans to install its product in other cancer hospitals around the country in the coming months.
The fundraising “really enables our continuation” following the FDA approval, Forchette told Crain’s.
“So we’ve been (preparing) for manufacturing, production, and building out the commercial organization to be able to support this,” Forchette continued. “And so this (fundraising) was sort of in parallel with our building up the commercialization. But what it gives us is the fuel to be able to now aggressively deliver robust commercial activity.”
Forchette added that it’s “rightly so” that the Karmanos Cancer Institute be the first hospital to have Delphinus’ technology on-site, noting that the company’s two co-founders — Neb Duric and Peter Littrup — both worked at Karmanos where the company’s technology was initially conceived.
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“As a leading cancer center, we are committed to providing our patients with superior diagnostic and screening technology. The development of SoftVue, in partnership with Delphinus Medical Technologies, will further strengthen our fight against breast cancer that accounts for one in three new cancer diagnoses in women each year,” Karmanos President Brian Gamble said in a statement.
“The key to breast cancer survival is early detection and this new screening device will be lifesaving for so many women in our community,” Gamble continued. “Our clinical team worked hard for many years to develop this transformational technology, and we are proud to be the first in the world to offer SoftVue to our patients.”
Some 40 percent of women in the U.S. have dense breast tissue, according to data from the company. Those women have a four to six times greater risk of developing breast cancer because typical mammography alone misses about half the cancers in women with dense breasts, as dense tissue and cancer appear white on mammogram images.
Delphinus’ SoftVue machine and technology is used as an adjunct to digital mammography in the screening of asymptomatic women with dense breast tissue, according to the company’s description of the product.
SoftVue mammogram uses warm water and ultrasound technology to create a 3D image of the whole breast to detect the presence of cancer in its earliest stages — including masses in dense breast tissue often missed by mammography alone — while avoiding radiation exposure and compression, allowing the radiologist to make a more accurate diagnosis
The company says use of SoftVue leads to “greater accuracy and potentially fewer biopsies than full-field digital mammography (FFDM) alone,” and “is completed with no compression or radiation, and its PMA indication for use allows SoftVue exams to be performed at the same appointment as screening mammograms, facilitating a streamlined workflow and rapid delivery of results.”
The Series D funding for the company, which closed earlier this month, included investment from a mix of new and existing investors, including Arboretum Ventures, North Coast Technology Investors and Venture Investors, all with offices in Ann Arbor. Also participating in the round were Beringea of Farmington Hills, Hopen Life Science Ventures out of Grand Rapids and Waycross Ventures in Menlo Park, Calif.
“Our board of directors and investors are very excited to launch into commercial activities with SoftVue,” Paul McCreadie, partner and COO of Arboretum and Delphinus’ board chair, said in a statement.
“The successful completion of a rigorous clinical study that resulted in the PMA approval we received last year for dense breast screening will allow the Delphinus team to leverage the unique technology of SoftVue to change the paradigm for dense breast screening and help millions of women receive superior care,” McCreadie added. “We invest to allow breakthrough innovations to serve patients, and Delphinus is perfectly poised to do exactly that.”
Forchette declined to provide a valuation at which the round was raised, or provide revenue projections. The 10-year-old company had yet to have sales, the CEO said.
The plan going forward, Forchette said, is to roll out SoftVue in the 50 largest markets around the country. The company is in the process of building out the infrastructure to do so, the CEO said.
Asked about the potential likelihood for some sort of exit down the road now that Delphinus has reached commercialization stage, Forchette said all options will be on the table going forward, and that includes growing to an independent “multi-billion dollar company,” a possible initial public offering or an acquisition by a private equity firm.
“We’re built to allow all of those,” he said. “What’s really unique about this is it’s a breakthrough technology, but it is a breakthrough technology that establishes an entirely new category for a hospital has the potential to create really significant additional revenue as they serve patients, and do it overnight.”
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