Paige, the computational pathology startup targeting cancer, closes a Series B at $70M

Published July 13, 2020

Paige, the startup that spun out of the Memorial Sloan Kettering Cancer Center and launched in 2018 to help advance cancer research and care by applying AI to better understand cancer pathology, is today announcing a milestone in its growth story: it has raised a further $20 million from Goldman Sachs and Healthcare Venture Partners, closing out its Series B at $70 million.

Leo Grady, Paige’s CEO, says the funding will go toward several areas.

It will be used for hiring; to continue expanding its partnerships with biopharmaceutical companies (deals that have not yet been made public); and to continue investing in clinical work, based around algorithms it has built and trained using more than 25 million pathology slides in MSK’s archive, plus IP related to the AI-based computational pathology that underpins Paige’s work. It will also be used to help it expand to the U.K. and Europe. Paige has a CE mark to be used clinically in both regions and the startup already has beta sites in the U.K. and EU, but it hasn’t had a fully commercial launch in either region, Grady said.

Paige — which has now raised more than $95 million with other investors, including Breyer Capital, MSK and Kenan Turnacioglu — is keeping quiet about its valuation. But for some context, we noted that it was around $208 million when the first tranche of the round was announced — $45 million in December 2019, with a further $5 million in April. It attracted this latest $20 million in part because business has been strong, Grady noted. As a result, despite it being a generally tough climate for raising money right now, Paige didn’t face those challenges.

“The climate in which Goldman made its initial investment” — the $5 million round in April — “was when COVID-19 had hit hard and they were realising the magnitude,” Grady said. “They wanted to see how things played out for Paige in the economy. But the way it has been going has been encouraging.”

Indeed, a lot of attention these days is focused around the current public health crisis making its way around the world in the form of COVID-19, and the knock-on effects that it is having across the economy and socially. Paige’s growth in that context has been interesting.

We’re still in the early stages of understanding COVID-19 and how it interacts with other conditions (such as cancer) — and it’s not an area that Paige is directly exploring in its work. But in the meantime, its platform — based around digitised slides — has come into its own for clinicians and others who can no longer regularly physically visit laboratories.

Paige’s enterprise imaging system — the company was co-founded by Dr Thomas Fuchs, known as the “father of computational pathology” and is the director of Computational Pathology in The Warren Alpert Center for Digital and Computational Pathology at Memorial Sloan Kettering, as well as a professor of machine learning at the Weill Cornell Graduate School of Medical Sciences; and Dr David Klimstra, chairman of the department of pathology at MSK — allows users to view digital slides remotely, and while all hardware manufacturers today have digital viewers, these are proprietary, tied to those scanners and “not built for high performance,” Grady noted.

Paige’s platform allows its users not only to share research and primary data without physically sending slides around, but to use high performance software built to “read” the data in a more comprehensive way than clinicians and researchers would otherwise be able to do. That initially has been applied to work in prostrate and breast cancers but is now also being explored around other cancers as well, Grady said. “We’re adding in information to the workflow, boosting the confidence and quality of data. The first piece [the platform and the slides] enables the second piece.”

The Goldman Sachs investment is coming from the financial services giant’s merchant banking division, and as part of it, David Castelblanco, MD at Goldman Sachs, has joined Paige’s board of directors.

“We have been very impressed with the company and its pace of development,” he said in a statement. “We are excited to increase our commitment to support Leo, Thomas and the Paige team’s transformative work with artificial intelligence and machine learning in the cancer field.”

“We initially invested in Paige recognizing the potential of their products to add significant value to the industry and impact the future of cancer care,” added Jeffrey C. Lightcap, senior managing director of Healthcare Venture Partners. “After seeing Paige make tremendous progress in such a short period, we added to our investment to further accelerate their growth.”

Paige raises $45M more to map the pathology of cancer using AI

Published December 18, 2019

One of the more notable startups using artificial intelligence to understand and fight cancer has raised $45 million more in funding to continue building out its operations and inch closer to commercialising its work.

Paige — which applies AI-based methods such as machine learning to better map the pathology of cancer, an essential component of understanding the origins and progress of a disease with seemingly infinite mutations (its name is an acronym of Pathology AI Guidance Engine) — says it will be use the funding to inch closer to FDA approvals for products it is developing in areas such as biomarkers and prognostic capabilities.

It also plans to use the funding to continue developing better ways of diagnosing and ultimately fighting the disease, as well as exploring further commercial opportunities for its work, specifically within the bio-pharmaceutical industry.

This round is being led by Healthcare Venture Partners, with previous investor Breyer Capital, Kenan Turnacioglu and other funds participating. The company is not disclosing its valuation, but PitchBook noted that a first close of this round (when it raised $33 million) put the valuation at $208 million. That would value Paige now at about $220 million with the $45 million close, more than three times its valuation in its previous round.

Paige first emerged from stealth back in 2018 — with a bang.

Paige.AI — as it was known at the time — was hatched inside the Memorial Sloan Kettering Cancer Center, one of the world’s foremost institutions both for working on cancer therapies and treating cancer patients, and along with a $25 million investment led by Jim Breyer, Paige had secured exclusive access to MSK’s 25 million pathology slides as well as its intellectual property related to the AI-based computational pathology that underpinned its work. These slides make up one of the biggest repositories of its kind in the world, and as all solutions and services built on machine learning are only as good as the data that’s fed into them, they were critical to the startup’s beginnings.

The startup also launched with some serious talent behind it.

Much of the computational pathology being used by Paige had been developed by Dr Thomas Fuchs, who is known as the “father of computational pathology” and is the director of Computational Pathology in The Warren Alpert Center for Digital and Computational Pathology at Memorial Sloan Kettering, as well as a professor of machine learning at the Weill Cornell Graduate School of Medical Sciences.

Fuchs co-founded Paige with Dr David Klimstra, chairman of the department of pathology at MSK, and Fuchs had originally started out as the CEO of Paige, but was replaced earlier this year by Leo Grady, who joined from another bio-startup, Heartflow (another company backed by Healthcare Venture Partners). Fuchs is still supporting the company, but no longer in an executive role.

In the nearly two years since it launched, there have been some milestones reached. The company, which has around 30 employees today, has been the first to get an FDA breakthrough designation (which helps expedite the long process of drug approvals in urgent areas where there are few or no other options for patients) for using AI in oncology pathology. It’s also the first to get a CE mark in the same category, which opens the door to working in Europe, too. Paige has so far ingested 1.2 million images into its slide database and is using them — in algorithms that also take in genomic data, drug response data and outcome data — to work on developing diagnostic solutions.

But as with all new medical products, progress is not measured in quarters as it might be with a more typical tech startup. Moving fast and breaking things is something to be avoided. So even with all of the above advances, there has yet to be any commercial products launched, nor is Grady giving any specific time frames for when they will. And when the company came out of stealth in 2018, it said it would be focusing on breast, prostate and other major cancers, although today it’s not as quick to specify what its targets will be when it does launch commercial products.

Similarly, it’s also expanding its remit from primarily clinical environments to pharmaceutical ones.

“The clinical side is still our focus, but this is an expansion and realisation that this has a broader impact, and that includes pharmaceutical customers,” Grady said.

And the dropping of the .AI in its name was also intentional, in part a reaction it seems to how much AI gets thrown around today.

“There is a fundamental misconception, which is thinking of AI as a product and not a technology,” said Grady. “It’s a technology set that can allow you to do many things that could not have been done in the past, but you need to apply it in a meaningful way. Developing a good AI and putting that on the market will not cut it in terms of clinical adoption.”

The funding round, Grady said, saw a lot of interest from strategic investors, although the company intentionally has stayed away from these.

“We were approached by all of the scanner vendors and some of the biopharmaceutical companies,” he said. “But we made the decision to not take a strategic investment with this round because we wanted to be neutral with hardware vendors and not be too tied with any one.”

He also pointed to the challenges of talking to investors when you are working in a cutting-edge area (a challenge that has foxed many an investor also into backing the wrong horses, too, such as Theranos).

“We’re at the intersection of three areas: tech, medical devices and clinical medicine, and life sciences and biotech,” he said. “Many investors sit squarely in one and don’t feel comfortable in others. That makes the conversations challenging and short. But there has been an increasing blend between those three sectors.”

That’s where Healthcare Venture Partners fits into the mix. “Paige exemplifies the benefits of digital pathology and represents the bright future of AI-driven medical diagnosis,” said Jeff Lightcap of Healthcare Venture Partners, in a statement. “As hospitals embark on digital transformations, they will face challenges associated with these transitions. We believe Paige addresses many of these issues by enhancing the ability of clinical teams and pathologists to collaborate. We’re confident in Paige’s future and believe they will continue to develop cutting-edge technologies that enable pathology departments to transform their practices, which have changed little in the last century.”

“We applaud Paige’s commitment to building clinical AI products that will improve the diagnostic process and patient care,” added Jim Breyer of Breyer Capital, in a statement. “This is a critical time for Pathology, as pathologists are carrying a heavier workload than ever before. Paige understands their needs and the team has built cutting-edge technologies to address them. Paige represents the future of computational pathology and we look forward to their continued growth and success.”