Seed money, expert advice, business contacts and other services from the University of Chicago helped PhysIQ (formerly known as VGBio) launch a service that it expects will improve patient care and reduce health care expenditures nationwide.
In 2011, the University of Chicago’s Innovation Fund awarded VGBio $75,000 to conduct a study of its predictive analytic technology built on research at the Argonne National Laboratory. The study was conducted at the University of Chicago Medical Center. After that, UChicagoTech, the university’s Center for Technology Development & Ventures, provided consultation and feedback. Recently, PhysIQ achieved an important milestone, securing $4.6 million of Series A funding. As a result, PhysIQ is almost ready to go to market.
“As the company works hard to achieve success, a little early support can help validate a technology and eventually lead to significant external funding, thereby helping a startup cross the Valley of Death” (the period before a startup begins to generate revenue), says Alan Thomas, Associate Vice President and Director of UChicagoTech.
“Without UChicagoTech’s early support, PhysIQ’s Series A funding would have been much more difficult, if not impossible,” says Gary Conkright, Chief Executive Officer of the company. “In order to attract Series A investors, we needed clinical data demonstrating that our technology works on human physiology. Meanwhile, to generate that data we needed capital. It was a chicken-and-egg scenario until UChicagoTech and the Innovation Fund got us over the hump.”
UChicagoTech provided PhysIQ more than capital, Conkright adds. “Their review panel gave us valuable feedback and provided contacts from which we’re still benefiting.”
On the back of such success, the Innovation Fund is now expanding to become a $20 million fund, and it’s being run through the new Chicago Innovation Exchange.
Launching PhysIQ not only took a lot of money, feedback and connections. It also took a lot of time and persistence. Its technology, which analyzes health care data such as heart rate, blood pressure and respiration to determine whether clinical attention is needed, grew out of research conducted at Argonne in the 1980s and 1990s to monitor nuclear power plants for early warning signs of equipment failure. In the late 1980s UChicagoTech’s predecessor saw the first invention disclosures related to this technology and began to build a patent portfolio.
In 1999, Conkright, with the help of UChicagoTech leadership, secured venture financing to launch SmartSignal, which applied this predictive analytic technology to a variety of applications, including monitoring aircraft engines, diesel powered locomotives, mining trucks and electrical power plants. In 2011, General Electric bought SmartSignal.
Meanwhile, Conkright set out to apply the predictive analytic technology to health care. “In today’s health care environment, providers are being challenged to improve clinical outcomes while reducing expenditures,” Conkright says. “This technology helps in both those ways by giving early warnings of medical problems that can be addressed quicker and more affordably than if the problems are allowed to progress and lead to avoidable hospital admissions.”
The PhysIQ platform is not disease specific but its initial focus has been on congestive heart failure and chronic obstructive pulmonary disease. “This just scratches the surface of diseases and conditions that could be treated more efficiently with the use of continuous, remote monitoring combined with our analytics,” Conkright says. “Plus, our technology could be used by health conscious individuals, who are increasingly wearing portable fitness monitors.”
When the company receives FDA market clearance, PhysIQ can market its platform and device, something Conkright hopes to do by early 2015.
“Technology commercialization is hard,” Conkright says. “It takes money, commitment and persistence, but it’s certainly worth the time and effort. UChicagoTech provides a team that knows how to get it right.”
Conkright, who earned his MBA at the University of Chicago Booth School of Business in 1982, says he will continue to monitor ideas, expertise and intellectual property coming out of campus for anything that could build upon PhysIQ’s technology or business. In addition, he’s eager to continue giving back to the University and UChicagoTech. He’s been judging Chicago Booth’s New Venture Challenge for years and hopes to serve as a mentor to other entrepreneurs coming up through UChicagoTech.
“As PhysIQ becomes profitable, it will be a great role model for the University as we continue to generate successful technology commercialization stories,” Thomas says. “What started as a set of algorithms at Argonne could soon be improving patient care around the country and helping to build up the entrepreneurial culture at Argonne and the University.”