Karius Secures $25 Million Debt Financing to Expand Infectious Disease Diagnostic Platform

Recently, VCBeat (WeChat Official Account: vcbeat) learned from foreign media reports that U.S. life sciences company Karius has completed a $25 million debt financing round. The financing was provided by Oxford Finance Corporation, a specialized finance company that offers senior debt to life sciences and healthcare services companies.

Karius, founded in 2014 and headquartered in California, USA, is a life sciences company. The company is dedicated to integrating infectious disease diagnostics with genomics and data, innovatively applying next-generation sequencing technology to analyze microbial cell-free DNA. Its genomics platform and clinically curated pathogen database provide deep insights into the microbial landscape, offering clinicians comprehensive, quantitative tests capable of identifying more than 1,000 pathogens directly from blood samples, while also helping the industry accelerate drug development. Karius Laboratory is CLIA-certified and CAP-accredited to perform high-complexity clinical laboratory testing.

Image from the Karius official website

Karius has launched the Karius® Test, also known as “plasma NGS for pathogen detection,” a plasma-based next-generation sequencing assay. This sequencing technology enables precise and comprehensive detection of more than 1,000 bacteria, DNA viruses, fungi, molds, and protozoa from a single noninvasive blood draw, allowing physicians to rapidly diagnose infections and provide more targeted treatment for patients.

As of this financing round, the company has completed three rounds of funding. In September 2014, Karius closed a $5 million seed round. In August 2015, the company raised $59 million in its Series A financing. With the addition of this $25 million debt financing, the total capital raised by the company since its inception amounts to $89 million.

Following the completion of this funding round, Karius stated that the proceeds would be used to expand its business reach, bring its services to more hospitals and patients, invest in additional clinical studies, and fund other technological and product innovations.

“Oxford Finance recognizes Karius’s potential to transform the field of infectious disease diagnostics. Our goal is to help save as many patients’ lives as possible by improving infection diagnosis,” said Mickey Kertesz, CEO of Karius.

Christopher A. Herr, Senior Managing Director at Oxford Finance, stated, “Karius’s ability to rapidly provide physicians with accurate information on a wide range of pathogens represents a significant advancement in the field of infectious disease diagnostics. We are pleased to provide working capital to Karius’s commercial team to help scale up testing in the U.S. market.”

Oxford Finance Corporation, established in 2002 and headquartered in Virginia with offices in Massachusetts and California, is a specialized financial services firm providing senior secured, asset-based, equipment, and working capital loans. A subsidiary of Sumitomo Mitsui Banking Corporation (SMBC) in the United States, Oxford Finance primarily serves public and private life sciences companies. In recent years, the company has originated more than $5 billion in loans, with credit facilities ranging from $5 million to $150 million.

CLIA is the abbreviation for Clinical Laboratory Improvement Amendments. CLIA laboratories are primarily regulated by three agencies: the Centers for Medicare & Medicaid Services (CMS), the Centers for Disease Control and Prevention (CDC), and the U.S. Food and Drug Administration (FDA). CMS is responsible for all financial management and administrative operations, including certification, fee collection, inspections, enforcement, surveys, approval of national waivers, approval of Proficiency Testing (PT) programs, and rulemaking. The CDC provides guidance on CLIA-related research and offers scientific, technical support, and advisory services to CMS. The FDA is responsible for categorizing clinical laboratory tests; regulating the use of certain diagnostic reagents and materials, as well as specific software within laboratory information systems; and overseeing the market clearance of in vitro diagnostic kits. Achieving CLIA certification signifies that the accuracy, reliability, and timeliness of a clinical laboratory’s test results are recognized under CLIA international standards, thereby paving the way for the laboratory to undertake more clinical trial projects. Currently, nearly 80% of laboratories in the United States have obtained CLIA certification.

CAP (College of American Pathologists) accreditation refers to the accreditation activities conducted by the College of American Pathologists for clinical laboratories. The accreditation standards are derived from documents developed by CAP itself, primarily referencing the operational standards and practice guidelines established by the National Committee for Clinical Laboratory Standards (NCCLS). CAP is a consortium composed of clinical laboratory scientists and pathologists, widely recognized as one of the leaders in medical laboratory quality assurance.