SAN FRANCISCO — Helmy Eltoukhy's company is on a roll. The start-up is a leading contender in the crowded field of firms working on "liquid biopsy" tests that aim to be able to tell in a single blood draw whether a person has cancer.
Venture investors are backing Guardant Health to the tune of nearly $200 million. Leading medical centers are testing its technology. And earlier this month, it presented promising data on how well its screening tool, which works by scanning for tiny DNA fragments shed by dying tumor cells, worked on an initial group of 10,000 patients with late-stage cancers.
Just one thing is holding the company back: Guardant Health has yet to get approval from government regulators.
As a tidal wave of new health-related gadgets, apps and tests hits the market, the Food and Drug Administration, the Federal Trade Commission and other enforcement agencies are showing up in Silicon Valley like they've never done before. They have slapped companies such as Theranos, 23andMe, Lumosity and Pathway Genomics with warning letters and fines and opened investigations into products that regulators believe promise more than they can deliver.
More regulatory scrutiny is probably coming. Venture capital investments in life sciences hit a record high in 2015, with $10.1 billion invested in 783 deals, and total start-up funding is approaching levels of the last dot-com bubble — a development that has some industry observers worried that pseudoscience is being confused with innovation.
But even as some companies push back against federal agencies' reach — contesting which rules, if any, apply to their work — there's now recognition that the government can be a powerful ally rather than a brake on progress. And its stamp of approval can take firms from being worth multimillions to multibillions.