Silicon Valley / San Jose Business Journal -- Mohan Uttarwar’s personal motivation to start BioImagene in 2003 is still a driving force behind the company.As an angel investor looking for a new opportunity, Uttarwar saw a friend suffer and eventually die of lung cancer. Uttarwar remembers watching a pathologist hunched over a microscope, counting cells by hand.
“I was shocked to hear that the pathology practice hasn’t changed in over 100 years,” Uttarwar said.
So Uttarwar hooked up with a team of specialists and a leading pathologist to do something about it.
Along with a handful of other companies such as General Electric Co.’s health care division and Aperio Technologies Inc., BioImagene specializes in digital pathology — the process of converting glass microscope slides into high-resolution digital images that can be viewed, managed and analyzed with a computer instead of a microscope. Pathologists use these images to detect abnormalities in tissue samples that could indicate disease.
Uttarwar claims his Cupertino-based company offers a complete package that his competitors don’t. It also develops and sells the hardware and software systems that help pathologists, researchers and drug developers in clinical diagnostics and life sciences interpret the information on the digitized glass slide. The company, focused on cancer diagnosis and preclinical research, has grown from four employees in 2003 to more than 100.
BioImagene recently closed its fourth funding round of $26 million, which the chief executive officer said will be used for capital expansion — growing sales and marketing into Europe and Asia. The company has also acquired two others to help ramp up.
Uttarwar said BioImagene should be profitable by the end of 2009. Current penetration in the $2.5 billion U.S. digital pathology market is less than 1 percent, said Uttarwar, who hopes to obtain at least one-third of the market share.
Artiman Ventures partner Yatin Mundkur said the emerging market isn’t being tackled by many startups because its problems are difficult to solve and it requires many skill sets to be successful. His firm has invested just less than $10 million in BioImagene.
“We are going to replace an aging technology,” said Hugh Wax, principal project manager, genetics division of Genzyme Corp. “We see this as a paradigm change from going and looking through a microscope.”
Wax said the biopharma company has invested millions of dollars in the technology for use with its automated analysis tool that focuses on the testing of breast cancer markers. However, he pointed out a challenge faced by the company — the large data size of the digitized slides and the storage space needed to accommodate them.
BioImagene’s chief medical officer, Dr. Robert Monroe, said digital pathology has been developing since the advent of digital cameras, which can be attached to microscopes to take photos of slides. But BioImagene’s digitized system takes it a step further.
The images can be sent electronically for second opinions or archived. BioImagene’s software can also be designed to automatically recognize features such as precancerous cells.
“It’s something that can really make our jobs easier. When you’re sitting at a microscope for hours and hours, there’s a tremendous fatigue factor,” he said, explaining how he could miss something because he can’t possibly look at every cell on every slide. “Digital pathology offers this tremendous assistance in helping pathologists to pick up things they might miss otherwise.”
However, barriers to the acceptance of the technology include the costs associated with instruments such as the scanners, Monroe said, which can cost as much as $150,000 and are a huge capital expenditure for a small pathology group to justify.
BioImagene is trying to emerge as an affordable option, where users don’t need an up-front capital budget to take advantage of the technology. The company offers programs starting at 99 cents per scan and $9.99 for analysis — a pay-as-you-go model that Uttarwar likened to downloading music on iTunes. Its unique, customized pricing model is determined by the number of slides scanned and tests run, and purchasing a system starts at about $50,000.
At-a-glance
BioImagene
CEO and President: Mohan Uttarwar
Headquarters: Cupertino
Employees: More than 100
Phone: 408.207.4200
Investors: Artiman Ventures, Ascension Health Ventures, Burrill & Co., ICCP Venture Partners Inc., National Healthcare Services
Web site: www.bioimagene.com
