Northern VCTs

Mercia leads $14m investment in lung cancer diagnosis platform

Optellum, an Oxford-based medtech company that provides a breakthrough AI platform to diagnose and treat early-stage lung cancer, has raised $14m in a Series A funding round. The investment will enable the company to scale its base, operations and commercial launches in the UK and USA, accelerate its research and development, and expand its platform into personalised therapy decisions, integrating imaging with molecular data, robotics, and liquid biopsies.

This funding round was led by Mercia, with additional investors Intuitive Ventures (Sunnyvale, California) and Black Opal Ventures (New York). Existing investors including St John’s College in the University of Oxford, IQ Capital, and the family office of Sir Martin & Lady Audrey Wood also participated in this round.

Lung cancer is the most common type of cancer and the leading cause of cancer deaths, with 1.8 million deaths worldwide each year. The current worldwide five-year survival rate is 20%, primarily because the majority of patients are diagnosed after symptoms have appeared and the disease has progressed to an advanced stage (Stage III or IV). In contrast, the survival rate for small tumours treated at Stage 1A is up to 90%. This disparity highlights a critical need for diagnosis and treatment at the earliest stage possible.

Optellum is the leader in AI-enabled lung cancer diagnosis, and the first and only medtech company to have attained FDA clearance, CE-MDR in the EU, and UKCA in the UK for its software platform Virtual Nodule Clinic. This first-of-a-kind platform can help physicians identify and track at-risk patients, and optimally diagnose the signs of lung cancer early so treatment can be started sooner for patients with tumours, and invasive procedures such as biopsies on benign lesions are minimised.

Jason Pesterfield, CEO at Optellum (pictured), said: “With this strong support and commitment of highly specialized investors, we are positioned to accelerate commercial deployment in both the UK and the United States to expand our installed base. Following years of research and clinical trials that have shown the impact of our software on the diagnosis of at-risk lung nodules, we’re focused on expanding patient access to this crucial technology and identifying deadly lung cancer faster in more at-risk people. The funding will also boost our research and development with world-leading institutions and partners to progress further innovation.”

Lead investor Mercia brings expertise in software technologies having a significant impact on global health issues and an existing portfolio that includes AI and machine-learning technology. Investment Director at Mercia, Stephen Johnson, said: “Optellum is the latest in a series of companies to channel research from the UK’s world-leading universities into commercially viable products which can make a difference to the provision of medical care. Having observed Optellum achieve great milestones over the years, we are now excited to become part of their success and apply our experience with scaling up software and deeptech companies to help accelerate Optellum’s impact on patient lives across the world.”

Intuitive Ventures, the independent venture capital arm of Intuitive (NASDAQ:ISRG), a world leader in medical robotics, including lung cancer care, was founded in 2020 to accelerate the future of minimally invasive care. The investment team support Optellum’s ambitions to think and move beyond earlier diagnosis into decision support across the treatment pathway; integrating liquid biopsies, molecular tests, and drug therapies.

“Lung cancer is an urgent public health crisis and Optellum’s groundbreaking approach utilizing AI to accelerate early detection and intervention may fundamentally alter the healthcare community’s approach to combating this disease,” said Oliver Keown, MD, Managing Director of Intuitive Ventures. “Optellum is uniquely positioned to align and provide considerable value to patients, providers, and payors alike. Intuitive Ventures is thrilled to provide our full arsenal of financial and strategic support to Optellum as we work towards a world of better outcomes for cancer patients.”

Physician-led, female-founded fund Black Opal Ventures has a mission to build better businesses and a better future at the intersection of healthcare and technology. Its expertise in reimbursement and health economics will assist Optellum, which recently announced a New Technology Ambulatory Payment Classification for Medicare patients in the USA.

Founder Tara Bishop, MD, commented: “We value solutions that make medicine more accurate and accessible. The strong validation data that underpins the Optellum solution has demonstrated its ability to make a difference to patients. We share Optellum’s vision of making this available to every doctor in every hospital – and transform the diagnosis and treatment path for lung cancer.”

Optellum’s platform was developed and clinically validated in partnership with leading universities and healthcare systems across the world. Optellum also has strategic collaborations with GE Healthcare and the Lung Cancer Initiative at Johnson & Johnson to accelerate clinical deployments and continue the advancement of the platform. In the UK Optellum’s solution is being used to predict at-risk lung nodules in a multi-centre study with NHS Trusts as part of a major investment in AI for healthcare.