Magnolia Medical Secures $20 Million Series C Funding to Establish New Blood Testing Standards

On January 31, 2019, VCBeat (WeChat official account: vcbeat) learned that Magnolia Medical, a developer of blood testing equipment, announced the completion of a $20 million Series C financing round. Led by RTW Investments, with participation from HealthQuest Capital, SightLine Partners, and Canepa Healthcare, the funding aims to expand the company’s infrastructure to meet market demand for the Steripath® Gen2 Initial Specimen Transfer Device. The funds will also support the company’s innovative devices for blood and body fluid collection and disease prevention, enhancing the accuracy, consistency, and predictability of critical diagnostic laboratory tests.

Magnolia Medical Technologies was founded in Seattle, Washington, USA, in 2011. It is a company engaged in the development, manufacturing, and sales of blood testing equipment and body fluid analysis devices. Over its first eight years since establishment, Magnolia Medical completed six rounds of financing: a $2.5 million seed round on August 30, 2013; a $6.2 million Series A round led by Rhapsody Venture Partners on June 3, 2015; a $13.8 million Series B round invested by HealthQuest Capital on July 15, 2016; and a $7.3 million Series B+ round on April 4, 2017.

Magnolia Medical established the ISDD technology platform for blood culture and contamination prevention, reducing the risk of Clostridioides infections, multidrug-resistant organisms, and other antibiotic-related complications, while lowering hospital costs. The company has built an intellectual property portfolio to protect its technologies and products, including more than 60 issued patents covering methods, devices, and design patents, as well as over 50 pending patent applications.

Greg Bullington, CEO of Magnolia Medical, stated, “We have made significant progress in precision testing for sepsis. Magnolia Medical has partnered with RTW to accelerate the expansion of the Steripath® platform and is working with policymakers to drive changes in blood culture guidelines and protocols, thereby enhancing patient safety and quality of care.” Mr. Bullington further noted, “Tens of millions of patients in the United States require blood cultures annually to diagnose sepsis and other potentially life-threatening bloodstream infections. Under current standards, approximately 40% of positive results are false positives due to contamination. In the United States alone, these erroneous diagnoses affect more than one million patients each year, resulting in over $5 billion in unnecessary healthcare costs.”

On August 30, 2018, Magnolia Medical announced the U.S. launch of Steripath® Gen2. Steripath® Gen2 is a patented technology and part of the Sepsis Testing Accuracy Initiative; it has been adopted by hospital customers as their standard platform for blood culture contamination prevention. Steripath® Gen2 enhances the usability features of clinically validated mechanical initial sample diversion. These features are incorporated into the new One-Step Diversion™ pre-assembled sterile vein-to-bottle closed system, providing users with ultimate control and experience. This technology can also be adopted at both individual hospital and health system levels.

RTW Investments is a company that invests in innovative healthcare, primarily focusing on medical technology platforms and disease areas.

SightLine Partners manages a venture capital fund that invests in late-stage medical technology companies. They provide customized financial and deal structures tailored to each company’s unique circumstances.

HealthQuest Capital is a private equity investment firm that invests across the entire healthcare industry, including medical devices, biopharmaceuticals, healthcare services, and healthcare IT.

Canepa Healthcare is a venture capital firm that primarily invests in the late-stage and growth-stage medical technology companies.

(Compiled by Zhang Yaping)