Labconnect secured $24.5 million in a series A funding round, led by ABS Capital Partners, amounting to $28.5 million in financing overall. The Seattle-based company provides laboratory and support services to medical device, biopharmaceutical and contract research organizations (CRO). Additional series A investors included Pablo Capital and Broadoak Capital Partners, who previously contributed $4 million.
No additional funding rounds are planned, the company told BioWorld MedTech.
Labconnect will use the financing to further its growth through planned initiatives, invest in technological and product upgrades as well as make additions to its salesforce and "proprietary specimen tracking and data integration services." Funding also will provide liquidity to shareholders. The round marked the first instance the company sought institutional equity funding, Labconnect reported. As part of the financing agreement, investors will place representatives on the company's board of directors; John Stobo, managing partner of ABS Capital, Tim Johnson of Broadoak Capital, and Mark Anderson of Pablo Capital will serve as board members.
"Part of our ongoing success stems from our focus on the critical functions provided by a central laboratory beyond testing," the company shared with BioWorld MedTech. "Labconnect has doubled in size over the last three years, and we expect another doubling within the next five years. The capital will help us continue our path of being "high tech/high touch" and a leader in managing highly complex clinical trials."
Labconnect provides laboratory testing and scientific services such as managing samples, kit building, laboratory testing and biorepository services to the CRO, device and pharmaceutical fields. The company, which was founded in 2002, does not operate brick and mortar laboratories, but manages its worldwide testing services through a primary and specialty laboratory network. They also offer related client services such as project and data management, data reporting, and customer outreach.
A March 2016 investment of $4 million by Broadoak was aimed at maintaining the company's growth and keeping it on track to reach its "2020 vision." Eric Hayashi, Labconnect president and CEO, said at that time the company had "enjoyed a compound annual growth rate of nearly 40 percent over the last several years," adding "we have a lot of green field ahead of us." The firm's rosy outlook was based on its Samplegistics specimen tracking system and preparation services for samples, which include peripheral blood mononuclear cell, RNA and DNA extraction and blood fractionation.
Focusing their business on small and mid-sized biopharmaceutical companies, Labconnect is able to "accommodate projects of varying size, complexity and geographic location," which allows them to take on work as firms outsource clinical trials, said the company.
"Labconnect is poised to continue its strong growth within the small and mid-tier biopharmaceutical market, accommodating the ever-increasing geographic and analytical complexity of clinical studies for our customers," said Hayashi with the most recent financing. "We continue to bridge the gap between biotechnology companies and our network of laboratory partners."
As pharmaceutical and medical device companies seek to find a less costly way to manage R&D, laboratory service companies and contract research groups have cropped up to meet the market need. Medrio, a San Francisco, Calif.-based health care technology clinical solutions provider, received $30 million in equity investment in May by Questa Capital Management to further grow the company. The firm currently manages electronic solutions for various CROs, including Inclin, of San Francisco, which manages phase I through phase IV trials from top to bottom with clinical and medical monitoring, site and data management, and IT and vendor management. Other Medrio collaborators include boutique trial manager Advanced CRO, which handles project and regulatory concerns as well as compliance and clinical monitoring and operations. Bioprecision Group, a CRO for medical device, pharmaceutical and biotechnology fields, and A2 Healthcare, a CRO based in Japan, are also among other clinical trial management providers with Medrio.
Medpace Medical Device, of Circle Pines, Minn., assists device-makers with clinical trials through end-to-end support, including contact with trusted research sites and experienced clinical trial experts, and regulatory guidance. The company also provides staff culturally knowledge in each research region to ensure trials and results are accurate for each site.
San Diego, Calif.-based Managedlab Inc. provides custom support to biotechnology and pharmaceutical companies through operations management like laboratory asset and inventory control, washing services as well as added personnel for a research team through laboratory technicians or researchers. The company also provides planning and program guidance through its consulting services and IT support.