Nicoya Lifesciences, which provides advanced analytical instruments to researchers in the biotech and pharmaceutical industries, has acquired fellow Kitchener-Waterloo startup LSK Technologies.
The deal represents Nicoya’s first acquisition to date. LSK, which was spun out of the University of Toronto (U of T), claims to offer “lab-quality testing without the lab.” The financial terms of the transaction, which will see Nicoya acquire LSK’s team, tech, and customers, were not disclosed.
“What they’ve developed is this really natural fit with the core tech platform that we have at Nicoya.”
-Ryan Denomme, Nicoya
Nicoya founder and CEO Ryan Denomme described the acquisition as “a natural progression” for the two companies, which are both working to make laboratory-calibre testing more accessible and affordable for a range of applications.
In an interview with BetaKit, Denomme said LSK was initially looking to raise some capital before the acquisition took place. “I think it became clear on both sides that there was an alternate path for [LSK] to be able to see their technology successfully commercialized,” he said.
“What they’ve developed is this really natural fit with the core tech platform that we have at Nicoya,” said Denomme.
Denomme added that the LSK acquisition offers a “game-changing opportunity” for Nicoya to bolster its foundation in point-of-need testing, and speed up its product development plans.
The acquisition comes just over four months after Nicoya announced a $20 million CAD extension to its $10 million January 2020 Series A round. This Series A extension was led by Whitecap Venture Partners, with participation from a group that includes Agilent Technologies, EDC, BDC Capital, MaRS IAF, Garage Capital, and other investors.
Spun out of the University of Waterloo in 2012, Nicoya uses nanotechnology, microfluidics (the science of manipulating and controlling fluids), and artificial intelligence to develop products that help scientists better understand and develop treatments for diseases such as cancer, hepatitis, and Alzheimer’s.
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Nicoya’s main product, Alto, is that digital proteomics solution that aims to help researchers accelerate drug discovery efforts. Nicoya also offers some other products, including a benchtop instrument for measuring drug candidates at the molecular level, and a fully automated molecular analysis instrument.
In addition to venture financing, Nicoya has secured support from the federal government over the past couple of years to develop Atlas, its own rapid, saliva-based COVID-19 antigen test.
Meanwhile, LSK Technologies aims to decentralize lab testing with its high-throughput “lab-in-a-box” platform. LSK’s tech originated in a U of T lab in 2016, where it was initially used for Zika virus detection. LSK was founded by CEO Seray Çiçek and COO Yuxiu Livia Guo invented and field tested the tech with Keith Pardee, a U of T assistant professor and Canada Research Chair in Synthetic Biology in Human Health.
With support from the University of Waterloo’s Velocity incubator, U of T incubators Health Innovation Hub (H2i) and UTEST, and international accelerator Y Combinator, Çiçek and Guo expanded this tech to conduct a wider range of viral detection tests.
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Like Nicoya, LSK has joined the fight against COVID-19. Alongside a wave of other companies, including The Canadian Shield, LSK pivoted to helping the fight against COVID-19 by ensuring its tech was capable of testing for SARS-CoV-2—the coronavirus. The company served as a “key” supporting partner for a 2020 federal grant designed to scale up portable diagnostic testing for COVID-19.
“LSK Technologies will continue to work on the same vision of making lab quality testing accessible and affordable,” Çiçek told BetaKit. “By joining forces with Nicoya, we will tap into their international expertise in sales/distributors and work on merging the two technologies. All of which will significantly accelerate the time required to achieve this goal and boost the size of this opportunity.”
A lot of the work Nicoya has been doing to date is geared towards proteomics, and specifically, immunoassay development. “That’s where a lot of our expertise is and where the technology is currently focused on,” said Denomme.
But Denomme sees “a lot of opportunity” for Nicoya to apply the same sorts of principles to molecular testing, where instead of detecting proteins, the focus is on detecting nucleic acids. Enter LSK, which has expertise and experience in this area. For Nicoya, which was always planning to expand more into this space, acquiring LSK offered a faster and more cost-effective means of doing so.
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As part of the acquisition, three LSK employees, including Çiçek and Guo, will join Nicoya’s 100-plus member staff, where they will focus on further developing Nicoya’s digital microfluidic-based testing platform.
Denomme said the fact that LSK is also based in Kitchener was a factor from an ease-of-integration and talent perspective, adding that it is tough to find local skilled workers, let alone people “with experience actually building life sciences devices.”
Going forward, Nicoya plans to continue to support LSK’s existing customers, and offer LSK products under the Nicoya brand.
Both Nicoya and LSK currently offer research-only products, where Nicoya’s current focus remains. But over time, Nicoya plans to develop its tech for point-of-care applications.
Denomme described the LSK deal as “the first of many” acquisitions for Nicoya.
“Ultimately, our platform is a really good fit for those types of medical testing and medical diagnostic applications,” said Denomme. “And we see a future there for the technology.”
Denomme described the LSK deal as “the first of many” acquisitions for Nicoya.
According to Denomme, there is “a lot of great technology” being developed in labs or at small companies that can be challenging to get into the market at scale. Given Nicoya’s size, expertise, and experience crossing some of these barriers, the CEO sees an opportunity for Nicoya to step in and help.
“We have well-established sales and marketing channels,” said Denomme. “We know how to bring these products to market and how to commercialize them.”
Feature image of LSK Technologies’ co-founders, courtesy Nicoya.