SEATTLE, WA--(Marketwired - July 13, 2016) - Magnolia Medical Technologies, developer of the SteriPath® blood collection system and leader in improving the quality and accuracy of in-vitro diagnostic test results, today announced the closing of the company's $13.8 million Series B financing led by HealthQuest Capital. In conjunction with the financing, Garheng Kong, M.D., Ph.D., founder and managing partner of HealthQuest Capital will join the company's board.
Proceeds from the financing will be used to accelerate commercialization of Magnolia Medical's flagship product line, the SteriPath blood collection system. Funding will also support on-going development of the company's planned roadmap of devices designed to eliminate human errors that cause false positive and false negative clinical laboratory test results.
SteriPath is the only commercially available device on the market designed to eradicate false positive blood cultures, the 'standard of care' blood test used to diagnose sepsis, a potentially life-threatening complication of a bloodstream infection. Sepsis claims over 200,000 lives in the United States each year, and is among the top five leading causes of death.
More than one million Americans are falsely diagnosed with sepsis each year costing the healthcare system more than $4 billion while putting patients at risk for subsequent unnecessary treatment due to false positive blood culture results. An average of 20 to 50 percent of positive blood cultures are ultimately determined to be false positive, often exposing patients to potent antibiotic treatments that may be unnecessary and typically extend the period of time patients remain in the hospital. With longer patient stays, the risk of hospital-acquired conditions rises.
"In today's hospital environment, new technologies and products must significantly improve patient safety and outcomes while driving substantial cost savings. The commercial traction Magnolia Medical has demonstrated affirms that SteriPath delivers on both of these requirements," said Dr. Kong. "We look forward to working with Magnolia Medical's team to advance SteriPath's commercial success as well as continue to broaden the company's product and intellectual property portfolio, both of which are quite substantial at this stage of the company's development."
"Given the significant clinical impact that we've demonstrated with SteriPath, timing is perfect to partner with Dr. Kong and the HealthQuest team to leverage collective expertise as we continue to rapidly build our organization and drive 'standard of care' adoption for SteriPath," said Greg Bullington, co-founder and CEO of Magnolia Medical Technologies.
In real-world clinical environments, at a broad range of Integrated Delivery Networks (IDNs), managed care organizations and government-operated hospitals, SteriPath has reduced false positive results by an average of 93 percent. These improvements in blood culture accuracy reduce unnecessary antibiotic treatments and the length of patient hospital stays, delivering strong clinical and economic outcomes for healthcare organizations.
"We are fortunate to have the continued guidance and counsel of an exceptional group of world-renowned clinical experts as well as strategic advisors and are pleased to add HealthQuest Capital to the team as we drive forward on an exciting growth trajectory," added Bullington.
About Magnolia Medical Technologies
Magnolia Medical develops and manufactures innovative blood and bodily fluid collection devices that significantly improve the accuracy, consistency and predictability of critical in-vitro diagnostic (IVD) tests. False positive and false negative laboratory test results in the acute care setting create confusion and uncertainty that often lead to inappropriate, unnecessary treatments. These misdiagnoses often significantly increase utilization of antibiotics and associated complications as well as patient length of stay and risk for healthcare-associated infections (HAIs). By mechanically eliminating human errors that cause erroneous test results through elegantly engineered bodily fluid collection devices, Magnolia Medical's products significantly improve patient safety and reduce hospital costs. For more information, visit www.magnolia-medical.com.