A Triangle newborn health screening startup calling itself Baebies said Monday it has completed a $13 million round in equity financing to develop its neonatal screening technology.
Financial backers of the 2-year-old Durham company include Rex Health Ventures, a venture capital fund owned by Rex Hospital in Raleigh; Duke Angel Network, a group of Duke University alumni; and DUMAC, an investment organization controlled by Duke University. The N.C. Biotechnology Center also provided a $500,000 loan.
Baebies co-founder Richard West said the 40-employee company had been funded by these investors for the past several years and is now completing the financing round. West said Baebies expects to be selling its products commercially by 2016.
“We plan to build a very large company,” West said. “Certainly in the hundreds of people, hopefully bigger than that.”
Baebies (pronounced “babies”) is developing a technology to expand the number of newborn health screenings and to expand newborn screenings to developing countries that currently don’t screen newborns for treatable congenital conditions.
North Carolina, for example, requires screening for 31 conditions, but some states require more than 50 conditions, said Robert Helmedag, director of Rex Health Ventures.
“What we liked is there are over 200 genetic conditions that (newborns) can be screened for at birth that are treatable,” Helmedag said. “We see Baebies really well positioned to grab those tests when they come out.”
Baebies is developing the technology under license from Illumina, the global genetic sequencing and genotyping company. Illumina acquired the screening technology in 2013 for $96 million from Advanced Liquid Logic, the most recent startup created by West and his business partner Vamsee Pamula, now Baebies’ president.
Thus West and Pamula are continuing to develop the medical technology they had developed at Advanced Liquid Logic, a Duke University spinout.
“What all this means is that we get to start the company in the middle, not at the beginning,” West said in the company’s news release.
The technology requires regulatory approval to be used at the 37 state labs that perform neonatal testing, and it would require regulatory review to be sold commercially to hospitals and other health care organizations, West said.
More than 100 million babies born each year receive no neonatal screening, West said. About 37 million babies are screened annually in the United States and other industrialized nations.