A leading biotechnology startup from Toronto’s University Health Network (UHN) has raised US$60-million from some of the biggest U.S. investors in the sector to help develop its cutting-edge cancer detection technology.
Adela Inc. is a diagnostics company that aims to identify multiple types of cancers and other conditions with a simple blood test. The team has been working on the technology since 2016, and Adela was founded in 2020.
The Toronto-based startup has secured US$60-million in its Series A funding round, led by U.S.-based F-Prime Capital and backed by OrbiMed, Deerfield Management, Decheng Capital and RA Capital Management. Series A is generally a company’s first significant round of venture capital funding.
The global funds have a history of significant investment within the biotech industry: In May, 2020, OrbiMed led the Series B financing for AbCellera Biologics Inc. In December that year, AbCellera had the largest ever initial public offering by a Canadian biotechnology company.
Several U.S. companies in the field of early cancer detection have recently received funding, including Grail Inc. and Freenome Inc., which raised US$5-billion and more than US$500-million, respectively.
According to Brian Bloom of Toronto-based health care investment firm Bloom Burton & Co., this is the first institutionally-backed company in this field in Canada.
Adela was incubated within the UHN, which has spawned other successful biotech companies in recent years, including BlueRock Therapeutics LLC and Avrobio Inc.
“We recognized early on that Adela’s technology could be a game changer,” said Mark Taylor, director of commercialization at UHN. “This is a world-class funding round with world-class investors. They’re some of the top investors in biotech in the world.”
Adela has 12 of employees working in Toronto, Connecticut and California, with the company’s chief officers operating out of the UHN campus in Toronto.
“This Series A financing will enable us to validate our technology for use across a range of cancer types, both for early cancer detection, as well as for monitoring and management of patients with cancer,” said chief executive officer Scott Bratman, a radiation oncologist and internationally recognized expert in cell-free DNA.
Daniel De Carvalho, Adela’s chief scientific officer, is the inventor of Adela’s proprietary platform and a world-leading scholar in cancer epigenetics. So far, he has led his team to publish several peer-reviewed papers demonstrating the technology’s potential performance across 10 cancer types with more than 1,000 samples.
Mr. De Carvalho said this financing will help them roll out the research for their early-stage cancer diagnostics technology and move toward commercialization. Their technology is patented through Princess Margaret Cancer Centre, from whom they license it for commercialization.
While Mr. De Carvalho said it is too early to speculate on a future IPO, he is confident their unique testing approach will set them apart from others in the sector. Currently, he said, the most common tests for cancer target one organ at a time and are expensive. Adela’s one-test technology aims to scan for multiple cancers simultaneously without degrading the DNA sample. Adela’s proprietary technology uses machine learning to read DNA like a road map to detect and identify multiple cancers at once.
Previously, identifying a specific disease would require sequencing the whole genome, Mr. De Carvalho says. Other companies in this field get around the cost by only sequencing a single fragments of DNA – but this means only looking for one type of cancer at a time.
Instead, Adela’s technology works by scanning all the places where red flags could appear at the same time. This is done by looking for “DNA methylation” – a chemical modification that is frequently a signpost of cancer cells. Once identified and scanned, sophisticated machine-learning algorithms compare these DNA fragments to existing records of cancerous DNA to identify matches.
The company plans to leverage the same technology to detect other conditions outside of cancer, and to understand how patients are responding to treatment.
The funding for Adela marks another success story for Canadian biotech after a record-breaking 2020. The sector raised over $1-billion in venture capital last year, according to the Canadian Venture Capital & Private Equity Association.
This financing bodes well for the future of the Canadian biotechnology sector, said Brad Wouters, executive vice-president of science and research at UHN.
“I think this a reflection that Canada’s [biotech sector] is growing up. It shows we can attract people from anywhere around the world, we can attract funding from around the world and we’ve got the great science,” Mr. Wouters said.
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