LabNow, Inc., an Austin-based developer of a Point-of-Care diagnostic system used to treat AIDS patients in developing nations, has announced that it has raised $20 million in equity financing from Sammons Enterprises, Austin Ventures and local private investors.  This is good news for a company that was running on fumes after spending the first $14 million raised from a syndicate of private and venture investors led by George Soros.

CEO Rick Hawkins, who has founded and sold numerous pharmaceutical companies, says that the new funding will allow the company to begin manufacturing and start the FDA approval process.  Given that the LabNow system offers the potential to analyze blood and other fluid samples extremely rapidly and inexpensively, it seems that there would be a huge demand for this product from non-profits and medical centers in Africa and Asia.

This is also good news for the University of Texas.  The technology that LabNow is developing was actually invented by University of Texas chemistry professor John McDevitt and his colleagues in 1996.  After failing to find a licensing partner, UT was able to convince Hawkins to serve as CEO of the startup.  Shortly later, the Company raised its first round of funding, with John Thornton, general partner with Austin Ventures, saying at the time: “LabNow’s technology has the potential to provide significant improvements in healthcare to HIV/AIDS patients. By developing a new approach to medical diagnostics, LabNow is successfully using technology to directly improve people’s lives while building a strong, sustainable business.”  UT has spent about $18 million to develop the technology and likely still is a significant equity holder in the company.

We agree with Hawkins when he says: “Considering the tens of millions of people who need this test, the potential impact is huge. We’re now in the right position to capitalize on this opportunity.”

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