Dermatology platform PathologyWatch raised $25 million in its Series B financing round, the Salt Lake City-based startup announced Tuesday.
The company plans to use the money to expand—adding laboratories in Texas, Florida and Arizona—as well as grow its research on skin care diagnostics. PathologyWatch is also working on artificial intelligence technology that could help diagnose patients, once it gains Food and Drug Administration approval. The number of skin samples sent to the startup’s laboratories have quadrupled over the last year, Dan Lambert, CEO and cofounder told Crunchbase News.
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“As digital dermatopathology continues to grow, it has the potential to reduce the costs of pathology by billions while creating better patient care for everyone across the country,” Lambert said in a statement. “We’re thrilled to be winning so much volume so quickly.”
PathologyWatch’s platform includes its private laboratories where tests on patient biopsies can be prepared, evaluated by pathologists and scanned with reports on the findings that are accessible online at all times. The result is a more “democratized” health care operation that can make it easier to collaborate with other pathologists, and improve turnaround times and access to care, company leaders and investors say.
Ceros Capital Markets led the recent funding round while Spark Growth Ventures, Blueprint Health and Blackbrook Management Group participated in the Series B. Rock Creek Capital and SpringTide, which jointly led the company’s $7 million Series A funding round in July 2020, also invested in its most recent round.
“The ability to provide top-tier pathology services to all communities regardless of location brings hope to patients in underserved areas and can save countless lives,” Rick Stratford, managing director of Rock Creek Capital said in a statement. “PathologyWatch and other digital platforms like it are democratizing health care services and bringing hope and change to our health care systems.”
Dermatologists treat a long list of skin and tissue-related ailments, including skin cancer, which can become deadly and is a growing problem in the United States, according to data from the Centers for Disease Control and Prevention.
If caught early, skin cancer is highly treatable, according to the American Academy of Dermatology and PathologyWatch proponents say this is where the startup shines.
“For a dermatology practice to send nearly all skin biopsy volume for cancer diagnosis to PathologyWatch is a no-brainer,” Austin Walters, founder and managing partner at SpringTide said. “The company has worked hard to create a service that outperforms every other from both cost and quality perspectives.”
Although skin cancer comes in several forms, the rate of occurrence of one of the most serious types, melanoma, increased significantly between 1999 and 2018, the most recent year for which CDC data is available.
In 1999, the agency tallied nearly 41,000 cases of melanoma, which translated to about 15.2 cases per 100,000 people. That number has trended upwards since, landing at almost 84,000 cases in 2018, which shakes out to about 22 cases per 100,000 residents.
PathologyWatch has two labs, one in Utah and another in Southern California, and its three new laboratories in the Southern United States are set to open by the end of the year.
One day, the startup hopes to do diagnostics for other cancers, including prostate, gastrointestinal or gynecological. But for now, PathologyWatch is focused on its partnerships with dermatologists, and the new laboratory additions will allow the company to partner with clinics in states where skin cancers are the most common, Lambert said.
“In general, dermatologists want to send to a lab in their state, they don’t want to wait for five days for the sample to get all the way across the country,” he said. “We wanted to hit the most need the soonest, but we’ll probably eventually expand to other locations.”
Illustration: Li-Anne Dias
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