BioBehavioral Diagnostics Co., a Cambridge, Mass.-based developer of a diagnostic system for Attention Deficit Hyperactivity Disorder (ADHD), today announced that it has raised $8.5 million in Series A funding co-led by Sevin Rosen Funds and Tullis-Dickerson. ADHD is one of the most commonly-misdiagnosed conditions, and to date there are no objective methods of diagnosis. Instead, psychiatrics and physiologists use a series of tests – like putting together a series of puzzle blocks – in order to make a subjective determination. In other words, this could be a major breakthrough in what has become a $3 billion market. So we’ve got five questions for Dave McLean, who led the deal for Sevin Rosen:
1. Sevin Rosen is known as a chips and communications firm, and that’s also your personal background. Why invest in a healthcare services company?
We’ve actually been focused on the intersection of IT and life sciences for a while. For example, we did Metabolon in Fund IX. We also hired a guy named William Paiva last year as a venture partner to help us keep looking at the market dynamics of that intersection, and he was instrumental in working with me on this deal…
But Biobdx really is a software-as-a-service company whose target market just happens to be healthcare and, particularly, helping to diagnose ADHD. I’ve got other portfolio companies with similar software-as-a-service/recurring business models, like SensorLogic and Market6.
2. Your last name is McLean, and the company’s lead product is called the McLean Motion and Attention Test for ADHD. Is there a connection?
We were just talking about that. It’s a complete coincidence, although it almost caused me not to invest [laughing].
3. Ok, so tell me about this device. From what I understand, there isn’t anything on the market to diagnose ADHD. Instead, psychiatrics and physiologists examine a series of behavioral factors.
Don’t think of this as a device. The company produces a computer screen interface for patients, and is based on years of research by Marty Teicher at McLean Hospital, which is the largest psychiatric hospital in the Harvard Medical chain. It presents a set of three, five-minute tests, and is looking for three things. First, is the answer correct? Second, how long did it take to select an answer? Third is movement – it can sense if a person is sitting still, or is fidgeting, etc. It then analyses the answers by using a huge database that sits behind the screen.
What it then does is tell whether or not you have ADHD and, if so, which of the two subclasses. But it’s not just another diagnostic tool, because it also provides information on what would be appropriate drugs and dosages. It also can test people already on medication, and make sure that the current treatment is optimal.
4. So is this a replacement for medical professionals, or more of a tool to help compliment their existing diagnostic techniques?
It’s a compliment. We’re still in the process of building out our advisory board, but we’ve had lots of input from prominent psychiatric professionals who helped develop the DSM4 and DSM5 subjective guidelines that are used today.
5. Will this company require additional VC funding?
This is a very capital-efficient company, because the business model revolves around paying for service on an ongoing basis – for example, patients per month. We always plan and reserve for downstream investments as an early-stage firm, but I don’t think the company is going to require enormous amounts of capital going forward. The go-to-market strategy is very regionally-focused, so additional funding will be based on how those early rollouts go. I’d expect beta tests later this year, with a formal launch in 2008.
Note: I also asked Dave if he’d care to comment on the matter of Sevin Rosen postponing fundraising last year. Not surprisingly, he did not – although he promised to get in touch when there’s something to share.