This is the second article in a continuing monthly series chronicling the growth path of Genevolve Vision Diagnostics, a life sciences startup based in Albuquerque, NM that is commercializing cutting edge genetic research to develop new diagnostic tests and gene therapies for colour blindness.
In July 2002, a FedEx Boeing 727 carrying cargo crashed on its approach for a night-time landing in Tallahassee, Fl. A U.S. National Transportation Safety Board investigation identified the first officer’s colour vision deficiency as a factor in the crash and recommended that all existing colour vision testing protocols employed by the U.S. Federal Aviation Administration (FAA) be reviewed. Four years later, this case, and the issues which it raised about colour blindness testing in the commercial aviation industry, was the subject of a panel at an international workshop hosted by Saudi Arabian Airlines.
For Matt Lemelin, CEO of Genevolve Vision Diagnostics, stories such as this validate his company’s mandate, and commercial potential, to redefine how colour blindness is tested, diagnosed and treated. As Genevolve moves closer to its commercial launch, he is eagerly looking at specific industries such as aviation, where there is an opportunity for the company to establish new testing standards that are more fair and equitable. Genevolve’s ultimate goal is to create a global colour vision standard for all occupations.
As we discussed a month ago when we introduced Genevolve, the company’s underlying intellectual property has been recognized by Time Magazine as a top 10 scientific discovery of the year. Lemelin and his team have been working for two years to bring to market the first commercial product for vision professionals – the Eyedox Genetic Test for Color Vision. It’s been a challenging road thanks to meagre funding and a decision mid-course to switch to a different gene-sequencing platform – which delayed the product launch, but promised to reduce costs and improve efficiency and accuracy.
The quest for cash
When we caught up with Lemelin recently, he was busy trying to secure the company’s Series A round – a rather modest sum of US$100,000 – to add to the seed funding the company has already received to date. The fresh capital will be used to refine the business model, fund marketing and to engage in some legal housekeeping to add further protection to Genevolve’s underlying intellectual property.
In recent months, Lemelin has worked his network to reach out to a number of angel investors in the life sciences space. He has racked up significant travel costs and even brought potential investors together for a pitch session. But it has proven difficult to find investors with cash in hand willing to bank on molecular diagnostics. Many investors remain spooked by the current market volatility, while other opportunities lie offshore – securing an investment would incur additional legal costs and complexities.
“The challenge for us has been that there are few proven business models for commercializing molecular diagnostics technology,” Lemelin said. “As exciting as a genetic testing business sounds, many potential investors don’t understand the business, so it scares them off a little.”
But then he found his way to a U.S. finder who was willing to put up the $100,000 in return for a five percent commission and a one percent equity warrant.
“Securing private equity investment remains the best option for the company and from the surface it looks like a splendid investment opportunity,” Lemelin said.
But with any formal investment, the devil is often in the details. To complete the transaction, Lemelin attempted to recycle the future forward agreement template from one of his other investment discussions to save himself some legal costs, but after running it past his attorney, he discovered that even modest investment sums can’t escape the bureaucratic dictates of the U.S. Securities and Exchange Commission. Closing the deal will still incur steep fees and complex regulatory hurdles.
Getting ready to pounce
With or without that cash infusion, is the company on track to meet its yearend product launch deadline?
“I had a conference call with the inventor last week and maybe I will get a Christmas present this year,” Lemelin said. “ Eyedox should be completed by Christmas … which likely means end of January. Nonetheless, real progress is being made.”
But January would still put Genevolve on track to launch at a key trade show event in March – the annual meeting of the American Academy for Pediatric Ophthalmology and Strabismus.
“The future is hard to predict yet I am extremely optimistic – our most promising path of least resistance will be pediatric ophthalmologists,” Lemelin said. “Current tests typically can’t be carried out effectively until a child is five to seven years old. But we can test an infant with amazing accuracy.”
Taking to the skies
But as we said at the outset, Genevolve is also pursuing opportunities in other markets, such as aviation. In military aviation, individuals with colour blindness cannot become pilots. In civilian aviation, individuals with colour blindness can fly, but they face a number of different restrictions which limit their ability to pursue a commercial career, such as a prohibition against flying when they must depend solely on their instrumentation.
The issue, however, are the shortcomings of the tests which are used to diagnose colour vision.
“The FAA is clearly aware that its current methods pass some people who pose a safety hazard and fail others who are likely capable to fly,” Lemelin said. “One particular area to be keen of is air traffic controllers – their screens, along with cockpits, are getting increasingly colour complex, but the testing methods are badly outdated. Even inspectors are unfairly discriminated against because there is an obvious lack of understanding from regulators about testing colour blind employees.”
He is keeping a close eye on changes in the European Union that will see the European Aviation Safety Agency take over aviation regulation from the Joint Aviation Authority. This hand off will also include changes in existing regulations, including those regarding colour vision.
“The issue here is discrimination against pilots,” Lemelin said. “It is not clear how much colour vision a pilot actually needs to safely fly. If we could help mould new European regulations regarding colour vision, it would be a major step towards our goal of establishing a global colour vision standard.”
He believes that all it will take is one national regulator or military adopting Genevolve’s technology to create a domino effect for the company.
To help raise Genevolve’s profile within the aviation industry, Lemelin recently connected with Pedro A. de Ponte, the founder of CVD Pilots, an online community for pilots with colour vision deficiencies.
“Pedro has a number of contacts in the field, including the aviation medical examiners who have successfully overhauled the Australian colour vision rules to the applause of colour blinds everywhere,” Lemelin said.
“The recent buzz I am gaining with the aviation community is most exciting, but also in the general colour blind community and tapping into Mr. Flück’s following, this all helps to gaining a foothold,” Lemelin said. “Ultimately we need to become entrenched within the eye doctor community. These guys are a hesitant bunch, but with trade shows and gaining momentum with eye docs, physician adoption will likely grow and I look forward to the day it reaches the tipping point.”
In our next instalment, we’ll explore more in depth the challenges of being a life science startup attempting to secure financing and create a viable business model, the rapidly changing landscape for insurance reimbursement in the U.S., and the risk of your ongoing intellectual property development residing in the grey matter of one individual.