Reducing contamination during blood tests: Magnolia Medical lands $46M to fuel growth


Magnolia’s Steripath product portfolio. (Magnolia Photo)

Magnolia Medical Technologies, which markets devices to reduce blood sample contamination while puncturing the skin, has raised $46 million. The funding builds on a 65% increase in revenue last year, according to Magnolia chief commercial officer Robert Gerberich.

The company’s devices are used to prevent the entry of bacteria into blood samples when people are tested for sepsis, a life-threatening condition in which bacteria infect the bloodstream. People can be misdiagnosed if bacteria from the skin enter the blood sample.

 “Our mission as a company is to eliminate the misdiagnosis of sepsis,” Gerberich told GeekWire.

Patients being tested for sepsis are often elderly and vulnerable, and the treatment itself can cause harm if it is not needed. High-dose antibiotics, for instance, can have knock-on effects that weaken the body in vulnerable individuals.

Magnolia CEO Greg Bullington. (Magnolia Photo)

The company launched in 2011 to develop devices that divert the initial volume of blood sample in a waste tube prior to sample collection, reducing contamination.

Preventing misdiagnosis had been a career-long concern for Magnolia co-founder Richard Patton, former medical director of clinical Laboratories at University of Washington Medicine/Northwest Medical Center.

During his work as a pathologist, Patton noticed that skin fragments in needle biopsies often contained bacteria embedded in the skin layers. And he suspected that these bacteria might also contaminate blood samples. In 2010 he published a study assessing this hypothesis. He found that contamination occurred in 3.6% of samples.

In his study, Patton tested a device that diverted the initial volume of blood prior to sample collection, finding that it could reduce contamination. That initial device became the basis for Magnolia, which Patton co-founded with CEO Greg Bullington.

Magnolia engineered and honed the system, tested it and brought it through FDA clearance. According to Gerberich, the devices have been tested in more than a dozen studies and they cut contamination down to “near zero.”

Magnolia chief commercial officer Robert Gerberich. (Magnolia Photo)

In 2018 the company hired a sales team and bulked up its clinical organization to commercialize its “Steripath” products. Magnolia’s devices are now used by hundreds of hospitals and health systems, and the nearly 100-person company will be “growing substantially” over the next few years, said Gerberich.

The new funding will support further commercialization of the company’s existing products and the development of new innovations to address the “accuracy and timeliness of diagnosis,” said Gerberich. The company has more than 100 issued patents.

“Our goal remains to ensure every patient undergoing sepsis testing has access to our Steripath technology,” said Bullington in a statement announcing the funding, which brings total investments to date to $115 million.

The growth equity financing round was co-led by RTW Investments, LP and Sectoral Asset Management. Participants included new investor Janus Henderson Investors, and previous investors including HealthQuest Capital, Evidity Health Capital, and SightLine Partners.





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