Genetic diagnostics startup wins $4.5M venture investment - Albuquerque Journal

Genetic diagnostics startup wins $4.5M venture investment

Two UNM researchers, Nikolaus Mellios, left, and Alex Hafez,have developed an RNA-based tool to help diagnose depression and improve treatment. (Roberto E. Rosales/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

Albuquerque startup Circular Genomics won a $4.5 million venture investment to advance breakthrough technology to diagnose depression and other neurological disorders.

The technology, developed at the University of New Mexico, is harnessing RNA for the first time as an effective biomarker to decipher an individual’s genomic base for depression, as well as for such things as post-traumatic stress disorder. That could allow physicians to immediately determine the best treatment for patients, potentially eliminating today’s trial-and-error approach, where doctors prescribe anti-depressants without knowing if the specific medication offered will improve a particular patient’s condition.

It’s “personalized medicine” for brain disorders that could provide faster and more effective relief for patients, said Nikolaos Mellios, an assistant professor in the UNM Neurosciences Department who helped develop the technology.

“It can predict a patient’s sensitivity to anti-depressants to advise psychiatrists before treatment,” Mellios told the Journal. “Today, you go to a psychiatrist who prescribes an anti-depressant with no way of knowing if you’ll get better.”

Only 40% of patients on average respond to the first anti-depressant prescribed, and then it takes months to see if it works, Mellios said. That means 60% won’t get better and, after waiting four to six months, the doctor might prescribe another drug, or possibly just increase the dose of the medication the patient is already taking.

“Our diagnostic can help doctors make better choices with the first drug prescribed,” Mellios said. “If we can increase the first-time success from 40% to, say, 60%, we’re talking about millions more people who will get something effective on just their first visit to the doctor. That’s huge.”

Investor interest

That broad potential impact immediately attracted investors almost as soon as Mellios and company co-founder Alexander Hafez launched Circular Genomics last winter.

Hafez worked with Mellios to fully develop the diagnostic technology as a doctoral candidate in biomedical science. He graduated in January, launched the company with Mellios in February and then entered Circular Genomics into the Comcast Pitch Deck Competition in April.

That’s an annual event sponsored by Comcast and hosted by UNM Rainforest Innovations, which manages the university’s technology-transfer programs.

The company won the first-place $10,000 prize at the event, which puts startups directly in front of investors to promote networking between potential funders and aspiring entrepreneurs who are developing compelling products and services, said Rainforest Innovations CEO Lisa Kuuttila.

“It’s exciting because we don’t have a lot of technology today to address the problem of mental illness,” Kuuttila told the Journal. “A tool to diagnose disorders more effectively is extremely helpful. It generated immediate interest among investors at the pitch competition.”

Indeed, two of the lead investors in the newly approved $4.5 million venture round – Waneta Tuttle of Albuquerque-based Tramway Venture Partners and David Blivin of Cottonwood Technology Funds in Santa Fe – both learned about Circular Genomics at the Comcast event.

Blivin called it “disruptive technology” that caught his attention, especially because it dispelled his misconception that diagnosing depression is a “subjective” matter.

“The idea that you can actually tie it to clear biomarkers to diagnose it and then present reliable treatment that’s best for the patient with quick validation based on how the body reacts is very intriguing,” Blivin told the Journal. “It can have a big impact on so many people’s lives.”

A number of individual investors joined the funding round, as did Tennessee-based Mountain Group Partners, a venture fund that focuses on early-stage life sciences technology.

‘Circular’ RNA

The company’s breakthrough is based on “circular RNA,” something that medical researchers discovered only in the past decade. Before that, scientists tried unsuccessfully to capture linear strands of RNA for analysis, hoping to measure the specific genes and proteins from those RNA samples to diagnose what’s happening with individuals experiencing brain-related disorders, said Hafez, who is now Circular Genomics’ president and head of clinical operations.

The Bioscience Center in Uptown Albuquerque is currently the home of Circular Genomics, which has developed a new RNA-based diagnostic tool that helps physicians diagnose and treat depression and other mental illnesses. (Roberto E. Rosales/Albuquerque Journal)

The problem with linear RNA is that enzymes in the blood attach to the ends of RNA strands and quickly chew their way inward, rapidly degrading the strands and making it nearly impossible to isolate them for analysis, Hafez said.

“With the RNA degrading so fast, you couldn’t easily look at the genes being expressed in the brain or in blood,” Hafez told the Journal.

In contrast, circular RNA is shaped like a doughnut, with no ends for enzymes to attach to, allowing the circular strands to remain stable for much longer.

“Circular RNA is naturally expressed in the body, and it evades that rapid degradation common in linear RNA,” Hafez said. “… Because it remains stable for much longer, we can detect it and capture it in blood samples to measure the genes and proteins associated with pathways related to depression and other psychiatric conditions.”

That’s the basis for Circular Genomics’ diagnostic technology.

“RNA is a good messenger of what’s happening in a person’s body, but it (linear RNA) breaks down too fast,” Mellios said. “CircRNA provides a stable biomarker of a person’s current state of health.”

Timeline to market

The company has developed diagnostic tools for circular RNA with predictive algorithms that can indicate the best treatment for individuals, Hafez said. The company is now working to achieve regulatory approval that will allow medical providers to send blood samples in for analysis, with results that can guide treatment options.

It could take about two years to begin commercial operations, Hafez said. The company will seek Clinical Laboratory Improvement, or CLIA, certification, which would allow it to do in-house diagnostics for medical providers. It will simultaneously pursue U.S. Food and Drug Administration approval. That takes longer, but, once achieved, allows third-party labs to analyze blood samples for doctors using Circular Genomics product.

The new investment will permit the company to move out of its current offices at the Bioscience Center in Uptown Albuquerque to an independent facility with laboratory space early next year, where it will continue clinical analysis and trials for regulatory approvals. Hafez expects to hire 10 new employees in 2022.

The company will first focus on diagnostics for depression, and later progress to diagnostics for such other brain-related conditions as Alzheimer’s, PTSD and bipolar disorder.

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