A start-up developing a medical patch has raised $11m largely led by two high net-worth family offices after being knocked back for federal funding.
Backed by former Cochlear chief executive Dr Chris Roberts, Nutromics said it was looking to expand production with a manufacturing centre locally or overseas, despite being knocked back for funding by the Morrison government under its $1.3bn modern manufacturing initiative.
The start-up was founded by Peter Vranes and Hitesh Mehta in Melbourne’s Brunswick in 2017, when the pair were sat on the same table at a Strategyzer course in Melbourne.
“We met after being randomly assigned to the same table and we got to talking and really connected about the need for a more proactive health care system,” Mr Vranes said.
Since then, Nutromics has gone on to develop what it calls a medical patch that is a bit smaller than the size of an AirPods case and contains four micro-needles, each 2mm in length, with four biosensors.
Dr Roberts, who one was of the investors in the $11m funding round, is now chairman of Nutromics.
The $11m round was otherwise largely led by two high net-worth family offices who put in nearly $10m, with participation from existing investor Artesian Capital. Nutromics would not disclose who the larger investors were.
A Nutromics medical patch.
The first product, which is under clinical trial on six patients at Monash Health centres, has just the four micro-needles and biosensors but Nutromics said it had the ability to add more micro-needles and hundreds of different sensors as the start-up grows.
“The engine of our technologies is a DNA-based sensor that allows us to monitor any diagnostic target continuously and in real time,” Mr Vranes said.
“Each different micro needle has a different sensor so we can do what’s called multi-analyte sensing which means we can stream continuously in real time and monitor multiple diagnostic targets.”
“We’re starting off with what’s called therapeutic drug monitoring. When people enter hospitals with a bacterial infection, they’re prescribed antibiotics but it’s really hard to dose those antibiotics.
“A lot of people die from getting toxic doses. If you get too high of a dose, you get an acute kidney injury, which can kill you or you get chronic kidney disease.
“One of the problems is that doctors just don’t have enough data to dose a patient with these drugs, often they’re “kind of blindfolded to a large extent.”
A Nutromics medical patch and monitoring device.
The patches have been tested over seven days, however in hospital environments, particularly in the ICU, they would be changed every 24 hours.
Mr Vranes believes the technology is an extension of continuous glucose monitors which are used in the treatment of diabetes.
The start-up is looking to take on what it says is a $US22bn ($32.9bn) total addressable market, which forms part of a larger $70bn in vitro diagnostic market, said Nutromics chief financial officer Rowan Wilkie.
The new funding would be used as capital runway and to have some strength on the balance sheet when approaching US investors for a Series A capital raise later this year, Mr Wilkie said.
“We’ll also prioritise investment in hiring, particularly around a sovereign capability in DNA synthesis, and to designing new biosensors,” he said.
The raise followed a $20m round Nutromics completed last year led by American medical device giant Dexcom as well as $5.7m in the previous year in a round led by Artesian Capital.
The start-up wants at least a further $50m later this year as it continues a clinical trial of its device on six people at Monash Health centres.
Mr Wilkie said Nutromics was almost exclusively seeking funding from the US, the first market it seeks to enter.
“The depth of the local market is thin in terms of both the size of capital and the sophistication and willingness to invest earlier in the investment spectrum,” Mr Wilkie said, adding, “there are much deeper pools of capital in the US that are targeted at those opportunities”.
Mr Vranes added that the size of the local venture capital market was “a real limitation that we have” and that the depth of expertise was often limited as well.
“In the US, you just have very large VCs that have very specific skill sets in certain verticals, and we just don’t have the size to be able to accommodate VCs like that here,” he said.
Nutromics would look to apply for further funding from the Victorian Government’s $2bn breakthrough fund.