Rho Venture Capital: 2005 News

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Germantown Biotech Closes $15M in Financing

NEIL ADLER
WASHINGTON BUSINESS JOURNAL
November 3, 2005

Sensors for Medicine and Science has raised $15 million that will be used to advance its glucose monitoring system for diabetics, moving it into human testing and on the path toward commercialization.

The financing closed Nov. 1, and is part of a $30 million, Series C round. The first tranche, also of $15 million, closed in April 2002. Germantown-based Sensors for Medicine and Science, founded in January 1997, has raised a total of about $45 million, says Marc Schneebaum, the company's president and CEO.

The money is expected to enable the privately held company to substantially complete clinical development of its continuous glucose monitoring system, designed to measure and display glucose levels every few minutes without user intervention. The system, which consists of an implanted glucose sensor and a watch reader, is in preclinical testing and should begin human trials in 2006, Schneebaum says.

Clinical development will take several years. The company says the sensor it is developing enables applications that haven't been practical with current technology.
Five previous investors participated in the latest funding tranche: Baltimore-based New Enterprise Associates, which provided the company's seed funding, HealthCare Ventures of Princeton, N.J., Rho Capital Partners of New York, Baltimore-based Anthem Capital and Abingworth Management, with U.S. offices in California and Massachusetts.

Sensors for Medicine and Science is developing modest revenue currently from sales of a second product, an oxygen sensor. Company executives hope to grow that product's sales, as well as tap into the $5 billion market for glucose monitoring products, a market expected to reach $10 billion in annual worldwide sales by 2010, Schneebaum says.

"It's a very big market," he says, one that is growing at double-digit rates.
The small Germantown company will compete with four industry giants who sell glucose monitors: Abbott Laboratories, Bayer, Johnson & Johnson and Roche.
Sensors for Medicine and Science employs about 20 folks and will hire a few more workers with the new money. It is evaluating possible partnerships with others in its industry because down the road the company with have to decide whether it wants to manufacture, distribute and market its glucose monitor -- if it's approved by federal regulators -- on its own or team up with a rival that has greater financial resources.

"This [system] would be a significant breakthrough for diabetes patients," Schneebaum says.