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Nanosphere Completes $10M Series C

After two years of research, Nanosphere Inc. is ready to put its nanotechnology-based biomolecular detection systems into the hands of researchers. With a $10 million Series C deal that closed last week, two government contracts and an international distribution deal already in place, the Northbrook, Ill.-based life sciences company should have its system out of the lab by the second half of 2003.

Lurie Investments of Chicago and Takara Bio Inc. of Japan led the round. Both are investors in the company’s previous rounds of financing.

Lurie was the company’s first institutional backer. In March 2000 it – along with friends and family – pumped a $3 million round of equity into the company. The same participants followed with a $5.5 million Series B round in March 2001.

The company also secured a $1.5 million research grant in September from the National Institutes of Health to fund the development of molecular diagnostic tests to assess genetic risk factors for blood clotting disorders and colorectal cancer.

Based on technology developed by Northwestern University researchers Robert Letsinger and Chad Merkin, Nanosphere has built a bio-molecule detection system. The system – essentially a lab-on-a-chip’- can be used to detect small fragments of DNA by identifying nucleic acids and proteins. The system’s DNA probes will bind to the target and then change color to signal that a specific segment is present within a DNA sample. Nanosphere’s system can be used by clinical researchers to spot diseases like herpes and HIV and to measure the bacterial content of food.

In October, the company began work on a contract with the U.S. Government Technical Support Working Group, a federal government-sponsored forum charged with identifying and coordinating the research and development of counterterrorism technology. Nanosphere is to develop a system for the federal government to detect traces of biological warfare agents like anthrax and plague in the water supply. The contract’s financial terms have not been disclosed.

The company will use its recent capital infusion to develop new applications using for its molecule detection platform and to commercialize the detection system.

Contact Carolina Braunschweig