Business

Lakewood Ranch biotech company receives $28M in funding

LAKEWOOD RANCH -- A biotech company that develops rapid diagnostic tests for eye diseases and for pathogens and chemical agents used in bioterrorism is putting $28 million in new investment money this week into its Lakewood Ranch research.

RPS Diagnostics Inc. announced the debt financing Monday after receiving news that medical industry investment firm OrbiMed would extend it. RPS, which moved to Lakewood Ranch in 2005 after being founded a year earlier in Philadelphia, developed and sells two eye disease- testing products, one for conjunctivitis or pink eye, and another for diagnosing dry eye disease using MMP-9, an inflammatory biomarker.. It is in clinical trials for a test for febrile respiratory illness, FebriDx.

According to an RPS press release, the company will use its new financing primarily to fund clinical trials of its products, but will also apply some of the funds to research. RPS has three products in clinical trials. Most of the money will go toward future debt incurred in trials and research, although a portion will pay on what RPS Chief Executive Officer Robert Sambursky called "limited current debt."

The money is important for the local bio and med tech industry, said James Humphrey, science chair of the Sarasota-Manatee chapter of industry group BioFlorida.

"That sort of money in one go, it's unusual," he said. "That sort of investment is the difference between make and break."

The money comes as RPS continues a two-year growth spurt. The workforce at RPS reached 50 employees this year, an increase of nearly 30 since 2012.

"Primarily all the hiring is geared toward the commercial expansion of our eye care sales force, internal marketing and sales support for FebriDx," Sambursky said.

Despite the growth, RPS is not yet profitable, but Sambursky said the company has estimated annual revenue growth of about 20 percent. He expects RPS to be in the black in the near future.

RPS has also grown physically in its headquarters and research facility, 7227 Delainey Court. In early 2013 and also this year, the company leased additional space to bring the size of its facility to about 10,000 square feet, up from about 3,300 square feet two years ago. RPS operates a Level 2 biosafety containment lab at its facility.

He credited the area's high quality of life and trained biotech workforce as being a factor in the company's expansion.

"There's enough here from the underlying biotech community to support the growth of our company," Sambursky said.

OrbiMed, which operates out of its U.S. headquarters in New York and others offices worldwide, is a publicly traded company that manages $13 billion in assets. The company is registered with the Securities and Exchange Commission.

W. Carter Neild, a general partner with OrbiMed, said investments like the one his firm is making in RPS vary widely in size. The RPS investment is toward the lower end of its debt financing spectrum.

"When we do debt financing like this, it can be as low $15 to $20 million, and upwards $90 million," he said.

Neither Neild nor Sambursky would discuss the terms of the financing. Sambursky did say the companies have arranged a deal that is strictly debt financing and that it involves no ownership stake.

Although RPS could have sold stock to raise capital, it took the OrbiMed loan to avoid diluting the value of shares company investors already own, according to the release.

RPS was founded by the Sambursky family and a partnering German biotech firm. Sambursky is still a working ophthalmologist who practices out of the Manatee-Sarasota Eye Clinic one day per week.

Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.

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