Progenity Raises $125M in Series B Financing

Another day, another massive investment in a genetics company.

Progenity announced today that it closed a Series B financing round worth $125 million. Athyrium Capital Management, which has invested in the company before, led the funding blitz.

The company, founded in 2012, focuses on women’s health, prenatal screening tests, and oncological risk assessments. Before this week, it had received only $25.5 million in outside funding, according to SEC filings.

“We are grateful for the continued support of our existing investors, and we welcome the new investors to the Progenity team,” said Harry Stylli, executive chairman and founder.

He said the business will use the proceeds to develop its gastrointestinal (GI) tract diagnostics platform, which will include diagnostics, precision medicine therapeutics, microbiome analytics, and consumer health nutrition information. The money will also help enhance the company’s “menu and service offerings” to its physician clients who work across the country in the women’s health space.

“The platform the team has built is a testament to the company's vision in women's wealth,” Jeffrey A. Ferrell, of Athyrium Capital, said of his firm’s decision to invest in Progenity. “With this financing, we believe that the company will be well capitalized to execute on its internal pipeline and business development opportunities.”

The investment comes on the heels of other big news in the genetic testing industry, particularly in the women’s health lane. Yesterday, Counsyl announced an $80 million investment from Perceptive Advisors. Like Progenity, the company has a Clinical Laboratory Improvement Amendments-certified lab that offers testing for fertility, prenatal care, and cancer risks. Both companies legally require a physician’s approval prior to testing.

The trend appears global: The Chinese company Annoroad, which also specializes in fertility and prenatal testing, announced a $105 million Series C round last week.

In the United States, meanwhile, regulators are easing the burden on the direct-to-consumer genetics market. The FDA announced this week plans to streamline the premarket review process, enabling test makers to bypass the obstacle when updating an existing assessment

So far, only the genetics giant 23andMe has earned FDA approval for a direct-to-consumer test. But together, regulatory changes and the stream of money could open the market to new players.