Seattle-based Magnolia Medical Technologies announced a $13.8 million funding round today, led by California-based HealthQuest Capital. Dr. Garheng Kong, HealthQuest founder, was also announced as a new addition to Magnolia Medical’s board.
The company’s flagship product, SteriPath, launched commercially in late 2014 and is currently being used or evaluated at 50 healthcare providers around the country. According to Co-Founder and CEO Greg Bullington, Magnolia Medical will use the new funding to support SteriPath’s commercial release and to fund R&D on future products.
SteriPath is a self-contained system which reduces false positives in the diagnosis of sepsis, a blood infection that kills more than 250,000 Americans each year, according to the CDC.
Magnolia Medical has focused on sepsis diagnosis because of the high risk of false positives, Bullington said. To diagnose sepsis, hospital personnel must follow a tedious, 25-step process. If anything goes wrong in any one of these steps, it is likely the test will be contaminated.
“An analogy would be that, in law enforcement and forensics, there’s always a chain of custody in how evidence is collected,” said Magnolia Medical spokesperson Marci Maule Housley. “If that chain of custody is broken, the results are not viable.”
On average, 20 to 50 percent of positive sepsis tests turn out to be false positives. These false positives, and the unnecessary treatment that often follows them, can actually worsen patients’ health. They are also costly for both patients and hospitals—based on current research, these false positives cost the healthcare system $4 billion yearly.
SteriPath reduces the complexity of a sample’s “chain of custody” by combining many steps into one automated process. This decreases the likelihood of contamination, and thus the likelihood of false positives.
Bullington said Magnolia Medical plans on finding similar solutions for other troublesome tests. “We have a whole product roadmap for additional tests beyond this first sepsis test,” he said. “What we’re really focused on is those tests that have a high error rate.”