This is what Pathworks did...I'm sure some big Pharma is interested in ROSG....
Pathwork Diagnostics, Novartis Strike Rare Research Deal
By Brian Gormley Of DOW JONES VENTUREWIRE Pathwork Diagnostics Inc. and Novartis AG (NVS, NOVN.VX) have formed a research partnership in a rare alliance that could become increasingly common in the diagnostic and pharmaceutical industries. Venture-backed Pathwork will work with Novartis's new molecular-diagnostics unit to discover biomarker signatures that can serve as the basis for diagnostics across a range of tumor types. Both companies have the right to develop and sell diagnostics, but they could extend this alliance, or form a second one, to advance products jointly. Financial terms are undisclosed. Alliances between pharmaceutical and diagnostics companies are unusual now, but that could change as drugmakers look to capitalize on advances making it possible to use biomarkers to match patients with the right medicines. This is the second commercial partnership for Novartis's molecular-diagnostics group, which struck a deal with Orion Genomics LLC in October to discover new epigenetic biomarkers. Pathwork, which has launched a molecular test that pinpoints the source of tumors of unclear origin, has fielded interest from multiple drug companies, said Chief Commercial Officer David Craford, but this is its first pharmaceutical alliance. The company, based in Redwood City, Calif., has raised $32 million through two rounds from Abingworth Management, Advent Venture Partners, Novus Ventures, Prospect Venture Partners, Venrock and Versant Ventures. It is wrapping up a Series C financing now, Chief Executive Deborah Neff said, but she did not give specifics. As it considers future products, such as tests to predict cancer recurrence or drug response, it made sense to work with a company that has a strong oncology business like Novartis, Neff said. Pathwork's test uses a microarray system to measure expression patterns of about 2,000 genes. The results are compared with a database of known tumor types. One benefit of knowing where a tumor originated is that physicians can prescribe newer, molecularly targeted drugs that are approved for specific types of cancer, Craford said. While drugmakers recognize the growing importance of diagnostics, integrating these tests into units that aren't used to working with them is a challenge, said Abingworth Partner Jonathan MacQuitty. Some seem to be waiting for outsiders to identify tests that could be paired with their medicines, but they would be better off working directly with diagnostics companies, he said. "Therapeutics groups traditionally have not had diagnostics to deal with, and it's not something they're familiar with," MacQuitty said. But, he said, "The better companies will realize that this is something that's really important." Novartis launched its molecular-diagnostics unit in late 2008 to identify companion tests that could be used with specific pharmaceuticals, and also to develop standalone diagnostics that improve clinical decision-making. It is looking into alliances with many types of companies, said Michael Nohaile, global head of the molecular-diagnostics group. "It's quite a broad array of capabilities [that are] needed to create a diagnostic," Nohaile said. "We're interested in all those areas." (This story also appears in Dow Jones VentureWire, a daily newsletter that covers venture-capital investing and start-up companies.) -By Brian Gormley, Dow Jones VentureWire; 617-823-8723
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