A Midtown-based diagnostics company raised capital in a deal to advance its novel approach to screening for the risk factors of esophageal cancer, a highly deadly cancer for which a diagnosis is usually a death sentence.
Publicly-traded Lucid Diagnostics brought in more than $15 million in a type of deal known as a registered direct offering, which lets the company raise money by selling stock directly to investors. Its main product is a DNA-testing device small enough to be swallowed, which can detect the biological markers that could lead to esophageal cancer, an aggressive disease that was diagnosed in more than 22,000 nationwide last year.
The company sold close to 14 million shares of stock to undisclosed investors through placement agent Canaccord Genuity, which took an $800,000 cut. The money will go towards Lucid’s general operating expenses as it seeks to get its test covered by Medicare this year, along with inroads among commercial insurers, said Dr. Lishan Aklog, chairman and CEO of PAVmed Inc., Lucid’s parent company. He hopes the test will also be adopted by concierge medicine providers, which will add another revenue stream and help the company eventually turn a profit, he said.
“We’re just at the final quarter of a mile to get to broad coverage,” he said.
Lucid’s screening tools, including the oral device used to collect samples and the proprietary DNA test that analyzes them, are an alternative to the current method for screening for esophageal cancer risk, which traditionally requires an endoscope – a tube with a camera that goes down the throat. The company is seeking to fill a niche in the booming market for endoscopic procedures, which has picked up with the growing demand for gastrointestinal treatments.
Endoscopy has exploded in recent years, as gastrointestinal screenings have become more common. The increased demand has been driven by guidelines calling for more frequent and earlier check-ups for diseases like colon cancer, which requires a colonoscopy, and the medical needs of an aging population. The global market for endoscopic devices has reached tens of billions of dollars. But while endoscopy is recommended for esophageal pre-cancer screening, it is underutilized, leaving many people to find out they were at risk for the disease only after it is diagnosed, which is almost always too late, Aklog said.
Lucid’s device, known as EsoCheck, is a vitamin-sized balloon attached to a catheter, which inflates in the lower esophagus. Ridges on the balloon’s surface swab cells before it is deflated and retracted. The company markets the method as a noninvasive, commercially available way to collect the cells needed for testing.
The device is used for detecting Barrett’s esophagus, a condition associated with gastroesophageal reflux disease or chronic heartburn that could be a precursor to cancer. The condition is common in the United States, affecting around 5% of the population.
