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Founders of molecular diagnostics company ChromaCode share ambitions for their business

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ChromaCode Co-Founders Alex Dickinson, Executive Chairman, Aditya Rajagopal, CTO, and CEO Greg Gosch talk about the formation of their molecular testing startup.

Why did you start this company?

Alex: I had started several companies with Professor Axel Scherer of Caltech, and Illumina acquired our company, Helixis. While I was at Illumina, they were nice enough to let me continue to work on startups independently. One of the things I learned at Illumina was that there was a lot of power in the reagent business. This was new to me as Helixis was an instrument company. I was always interested in what was going on at Caltech, and Axel introduced me to Aditya, who was a student there. When Aditya and I got together to talk about his work, what jumped out to me was the additional levels of multiplexing that he could do with polymerase chain reaction (PCR) reagents. I really liked the idea of putting together a company with Aditya and one focused on reagents. It seemed like an excellent path to build a reagent stream that could work on any PCR instrument.

Aditya: Interestingly, as an undergrad, I had worked for Alex at Helixis, and that was the inception of wanting to start my own company. Until then, I had my head wrapped around the idea that I just wanted to be a professor. When Alex and I reconnected in grad school, we felt that there was a real opportunity with the HDPCR technology that became ChromaCode. I got excited about the opportunity to start something myself, and the timing of meeting with Alex was perfect. I had learned some hard lessons while trying to make a qPCR instrument myself at Caltech. I put in a lot of effort and ended up with something that was a copycat product. Alex had shared with me how much harder it was to build hardware systems, and the reagent approach to multiplexing just seemed like an excellent entry into the marketplace.

Greg: I was the latecomer to the party. Alex and Aditya had incorporated the company when Aditya was at Caltech, and they were looking for someone with market expertise to balance out the team before initiating fundraising. Coming from the then market leader in mid-plex testing, Luminex, I recognized the unique potential of ChromaCode to compete in this space. The business model solved three key restraints all competitors faced: pricing resistance driven by the high cost-of-goods, limited access to the specialty equipment needed to run the then-available midplex tests and low throughput due to the cartridge-driven design of most competitors’ consumables. ChromaCode had the prospect of solving all three issues by delivering reagents and software that utilized high-throughput detection platforms that already exist in every molecular Dx lab, eliminating the need for expensive cartridges and reducing the cost by 10x versus existing options.

What specific need are you seeking to address in healthcare?

Aditya: Ultimately, we all want to help people by improving access to healthcare. A key challenge is that medical professional time is limited, and molecular diagnostics tools can automate clinical decisionmaking to improve access. ChromaCode’s technology makes PCR affordable enough that everybody can have access to it. It’s very clear now how important this access is for infectious-disease applications during a pandemic, but I think it’s equally important to have that access for things like oncology or genetic measurement. For example, my wife and I are expecting our first child, and we had a prenatal test. Because we weren’t in the right age bracket, insurance didn’t cover it. It happens that we can afford to pay for that test out of pocket. But for many families, paying $400 for an important screening test is not an option. ChromaCode’s technology can lower the barriers to access for clinical information that materially impacts patients and their families.

Alex: Coming out of Illumina, where next-generation sequencing is put forward as the solution to every clinical problem, I’ve seen first hand the challenges of getting a complex process like NGS to work in the clinical environment. What we’re demonstrating at ChromaCode is that PCR is a very, very elegant, simple and inexpensive process. As good as NGS is for research applications, it’s been clear to us for some time that if you are going to democratize molecular diagnostics, PCR is the right way to do that.

Greg: ChromaCode’s vision statement is, “connecting patients to the right treatment through smarter and more affordable diagnostics.” Correct treatment is driven by correct diagnosis. We break the traditional paradigm, which historically limited access to the most powerful diagnostic tools because they require new instrument platforms that are only available in advanced healthcare institutions. Moreover, these new platforms are often unaffordable. Due to the limited access and high cost, healthcare providers frequently test a patient with older, more available and more affordable technologies. Too often, these don’t provide a full diagnostic picture, and the patient remains sick. Only then are more powerful tools employed. ChromaCode eliminates that compromise. By deploying our inexpensive reagent kits and software using traditional PCR detection systems (that are available anywhere), physicians can initiate testing using the most informative diagnostics without having to worry about access or cost. This connects patients to the right answer early on, thereby improving treatment and outcomes.

What does your product do? How does it work?

Aditya: ChromaCode’s technology at its core enables the measurement of more disease targets at a lower cost. Mathematically, there’s a structured approach that we can take to PCR that lets us measure 4x the number of clinical targets at 1/4 of the cost. We’re in a position now to realize savings for the entire healthcare value chain, from the laboratories to the insurance companies to the patients themselves. I like to use the analogy of the transition from the telegraph to the telephone in the early 1900s. At the time, there wasn’t a mathematical sophistication about how signals were transmitted over wires. But to transmit more information, strategies like amplitude modulation were employed to increase bandwidth. So here we are around 100 years later, and there’s been a genetic information revolution — thanks to Illumina and companies like them — that’s necessitated more efficient ways to encode and transmit genetic information. And that’s where ChromaCode has an opportunity to make a difference — by using a mathematical approach to improve efficiencies needed in detecting and managing genetic information.

Greg: Our products allow our clinical laboratory customers to provide more comprehensive diagnostic results to their physician and hospital clients at lower prices. A simple example is respiratory viruses. Traditionally, when a patient presents with upper respiratory symptoms, physicians have to choose between a low-cost test that only covers the 2-3 most common viruses or a high-priced test that reports on the 10+ viruses known to cause these symptoms. If the low-priced test is negative, the physician doesn’t know whether it is one of the viruses that is not included in the test. They are then in the awkward position of telling the patient they don’t know what’s causing their symptoms. Our technology allows labs to test for 10+ viruses at prices that match the 2-3 virus test and will enable physicians to provide a definitive diagnosis at an affordable price.

Is this your first healthcare startup? What’s your background in healthcare?

Alex: My background is primarily electrical engineering, and I don’t have any formal training in healthcare. But I had done a series of startups with Caltech. Back in 2000, I was running a chip company, and some folks from Caltech approached me about doing my first healthcare company, which was Helixis. I was initially very skeptical because I didn’t know the area well, but the more I looked at it, the more interested I became — to the extent that eventually I decided to transition out of running the chip company and start running Helixis. I was very inspired about the opportunity to work in healthcare because it hadn’t previously crossed my mind that I had the expertise or background to do that. So ChromaCode is my second healthcare startup, although while at Illumina, I was very involved in building out their informatics infrastructure and a lot of the clinical applications that came with that for NGS and also running the population sequencing business — persuading countries to do very large scale sequencing projects to collect clinical information and deliver testing information to patients as well.

Aditya: This is the first company I’ve attempted to start in healthcare. My training is in electrical engineering and applied physics, but I was very excited about the opportunity to apply a signal processing strategy to medical diagnostics because I thought that others in the space hadn’t viewed the challenges from that lens — so there was a significant opportunity to make an impact.

Greg: I like to think that the three of us make an ideal founder combination. Alex is a strategically-minded serial entrepreneur, Aditya is an amazing inventor and I’m an experienced operator. I’ve had a traditional career that’s taught me how to build and scale teams and organizations. I’m a molecular biologist by training but have spent most of my career in strategic marketing and operations. I’ve spent the last 20 years in molecular diagnostics with companies as large as Bayer Healthcare to as small as Nanogen (150 employees). This is my first true startup.

What is your company’s business model?

Aditya: Our customers are the large diagnostic laboratories currently running testing and smaller academic laboratories that have clinical laboratories attached to their schools or their hospitals. To those customers that already have qPCR instruments, we sell the reagents that allow them to run tests with either greater frequency or at lower cost, or both.

Alex: With Covid testing, there have been massive shortages of reagents, so we see our ability to meet some of the demand there as critical to the continued operation of these laboratories to run.

Greg: We also partner with global clinical diagnostics companies. We enable their molecular diagnostic instruments to test for more disease targets per patient without any change to their hardware or software. We leverage their instrument install base and massive commercial channel. It allows us to stay small and nimble while creating a global reach.

Do you have clinical validation for your product?

Alex: Our initial validation was done internally for our COVID-19 assay in order to get FDA Emergency Use Authorization, but, since then, our customers have run more than 1 million of our COVID tests successfully. We also have other tests in development for infectious disease, oncology and prenatal testing (NIPT).

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