Startup's blood testing system to launch in pharmacies

• Babson Diagnostics expects the technology will be in more than 100 retail locations across Austin and San Antonio by the end of the year, according to Nicholas Turos, the company's vice president of business development.
• The company declined to say which H-E-B locations will be part of the July rollout, and a spokesperson for H-E-B did not respond to Axios' request for comment.

The big picture: Babson officials say the BetterWay system can measure the sorts of things gauged by a routine blood test taken from a vein on the inside of the elbow — like blood cell count, cholesterol and liver, kidney and thyroid function — from a few drops of blood.

• BetterWay is designed to be less painful and invasive, Babson CEO David Stein said.
• "Blood testing hasn't changed much in over 70 years," Stein said in a statement. "We intentionally designed BetterWay to create a better patient experience in convenient retail locations."

How it works: Babson will stock the pharmacies with BetterWay supplies for collection, including the company's device that automates blood sample preparation.

• The patient first places their hand on BetterWay's warming device with their fingers hanging over the edge. A trained pharmacy employee then slips a plastic device over the ring finger that has a lancet to prick the finger and wings at the top to squeeze the finger for blood.
• A tube attached to the base collects a pea-sized amount of blood before the pharmacy places the covered tube in a device that automates preparation, including mixing the blood and regulating its temperature.
• The collections are sent to Babson's lab in Austin, which can handle up to 40 million tests a year. Results take roughly one to two days.
• Clinicians will be able to place BetterWay orders for patients, or customers can order the tests directly.

Between the lines: Babson's promise to deliver results with a small sample of blood may sound familiar.

• It was also made by Elizabeth Holmes, the founder and former CEO of blood-testing company Theranos, who is serving a sentence of 11 years and three months for conspiracy and fraud against certain investors.

What they're saying: The company is leaning into the comparison and says it will be able to deliver what Theranos couldn't, according to founder and chief operating officer Eric Olson.

• "This is a company and a solution that's built by industry insiders, not by tech executives that want to disrupt an industry," Olson said at Babson's lab in North Austin this week.
• Plus, Olson said they knew early on that Theranos' vision of shrinking a laboratory "was not the road to success for routine testing."

Instead, Olson said they've come up with a hybrid model that enables their lab to run a small sample that's collected from capillary blood sampling at a retail store.

• "Rather than trying to miniaturize a lab, we're trying to make a small sample go a long way," Olson said.
• The company raised $31 million in a series B funding round in 2021 led by Emerald Development Managers. Existing investors include Siemens Healthineers, Prism Ventures, and Lago Consulting Group.

Of note: Babson, which spun off from Siemens Healthineers AG, received clearances from the Food and Drug Administration last year, which allowed the company to bring its BetterWay system to market.

• The approval through the FDA's 510(K) pathway means Babson had to show the administration that BetterWay devices were "substantially equivalent" to a device already on the market.

What we're watching: The accuracy of readings from such small samples as Babson scales, and how easily pharmacy employees with little experience in blood collection can learn the new technology.