Falcon Genomics Bankruptcy Underlines Pittsburgh Venture Capital Weakness
September 7, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Falcon Genomics, based in Allison Park, Pennsylvania, filed for Chapter 11 bankruptcy. The company had been trying to raise $5 million to $10 million in investment capital, but was unable to do so.
“I know we have a test that could save the lives of many breast cancer patients,” the company’s president and chief scientific officer, Rula Abbud-Antaki, told the Pittsburgh Post-Gazette in February. “We want to bring genomic testing to the clinic. But the hurdles we have overcome are not insignificant.”
The company was founded in 2004. In 2009, the company received a U.S. Patent for its Cancer BioChip System (CBCS) used to identify and validate possible cancer targets, which was validated for human breast cancer. At the time, Rula Abbud-Antaki president and chief scientific officer of Falcon, said in a statement, “Cancer is analogous to a physiological train-wreck. It only takes a small number of defective signals to trigger the multitudes of abnormal molecular profiles observed within cancer cells. Triggering molecules are the ones that must be targeted for therapy. Our proprietary technology will provide personalized identification of cancer-initiating events, and formulation of efficient and accurate therapies.”
In April 2015, it received Notice of Allowance for its patent application titled “Systems and Methods for Individualized Functional Genomic Profiling Related to Cancer Cell Growth.”
The company eventually went on to offer Falcon BCT, the Comprehensive Breast Cancer Classifier, which identifies eight breast cancer classes, Falcon Tamo, to determine whether Tamoxifen therapy will be effective, and Falcon CBCS, for patients whose cancers do not respond to current therapy, and screens for targeted and efficient therapies.
Falcon is working in a highly competitive marketplace, with companies like Quest Diagnostics , LabCorps (LH), Mayo Medical Laboratories, ARUP Laboratories and Myriad Genetics all offering highly specialized personalized testing options for cancer and pharmacogenetics. And they are only examples of the many companies working in this area.
In addition, the field of pharmacogenomics and pharmacogenetics hasn’t been as enthusiastically embraced by payers or physicians as it was expected to. It’s also possible that the Pittsburgh area doesn’t have the necessary investors for this type of business. The Pittsburgh Post-Gazette wrote in February, “Technical muscle aside, Pittsburgh may not have the investment infrastructure needed to nurture startups, experts say. And the challenges of a life sciences company can be formidable, with the prospect of Food and Drug Administration approval or clinical trials, said Pittsburgh Technology Council President and CEO Audrey Russo, who said early-stage investment in startups has lagged in the region in recent years.”
Peter DeComo, chairman and chief executive officer of Alung Technologies, told the Post-Gazette, “You can spin out technologies all day long. The problem is that if you can’t fund those companies, then spinning them out means nothing. You have to have capital to do that and big capital to do that.”
Addud-Antaki was previously a researcher and adjunct assistant professor at Cedars Sinai Medical Center and the University of California, Los Angeles. She co-founded Falcon with her husband, James Antaki, a professor of biomedical engineering and computer science at Carnegie Mellon University. James Antaki also founded the Laboratory for Innovation and Optimization of Medical Devices at Carnegie Mellon.
Falcon is filing for Chapter 11 in the Pittsburg U.S. Bankruptcy Court. It lists its assets as valued from $10 million to $50 million, with less than $2.6 million in debt.