Magnolia Medical Announces $46 Million Growth Equity Financing

Funding will further accelerate commercialization of the Steripath® Initial Specimen Diversion Device® platform and fast-track new innovations in sepsis diagnostic accuracy and timeliness

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Magnolia Medical Technologies

Feb 16, 2022, 13:15 ET

SEATTLE, Feb. 16, 2022 /PRNewswire/ -- Magnolia Medical Technologies, Inc., inventors of Steripath^®, the only FDA 510(k)-cleared device platform indicated to reduce blood culture contamination for sepsis testing,¹ today announced a $46 million growth equity financing co-led by RTW Investments, LP ("RTW") and Sectoral Asset Management with significant participation by new investor Janus Henderson Investors. All existing major investors including HealthQuest Capital, Evidity Health Capital, and SightLine Partners also participated in the financing.

Concurrent with the financing, Marc-Andre Marcotte, CFA, Partner at Sectoral Asset Management and Ovid Amadi, PhD, Senior Analyst at RTW have joined the Company's Board of Directors.

"The closing of this financing comes on the heels of our record-setting new account acquisition and top-line sales growth in Q4 and 2021," said Greg Bullington, CEO and co-founder of Magnolia Medical. "The clinical success we continue to achieve as we rapidly expand our hospital customer base is remarkable. Given the criticality of sepsis testing accuracy to enable appropriate patient treatment decisions, our goal remains to ensure every patient undergoing sepsis testing has access to our Steripath technology to dramatically improve the accuracy of the results."

"Additionally, this funding further enables us to fast-track new innovations, leveraging our extensive intellectual property portfolio, to advance Magnolia Medical's overall mission to eliminate the misdiagnosis of sepsis," Bullington added.

Steripath^® has been adopted in hundreds of U.S. hospitals and healthcare systems to address the problem of blood culture contamination, which can lead to sepsis misdiagnosis, unnecessary, prolonged, and harmful antibiotic treatment, false-positive central line-associated bloodstream infections (CLABSIs), and wasted healthcare resources.

"RTW remains committed to supporting Magnolia Medical and its management team in its mission to establish a new standard-of-care for sepsis testing accuracy to improve patient safety and outcomes, and enable cost-effective delivery of care," said Ovid Amadi. "As Board observers and advisors for the past three years, we have seen first-hand the team's strong leadership and execution resulting in accelerated market adoption of its platform technology, Steripath, and forward advancement of new innovative technologies."

"We are thrilled to be partnering with Magnolia Medical," said Marc-Andre Marcotte of Sectoral Asset Management. "The company is establishing a new standard-of-care and its best-in-class solution, Steripath, addresses a significant unmet need in healthcare. Magnolia Medical is an evidence-based company with outstanding clinically proven technology. We are impressed with the company's expanding customer base, strong growth trajectory, and the attractive opportunities that its future advanced technologies represent."

Steripath has demonstrated clinical- and cost-effectiveness in 20 studies, reporting sustained results of zero or near-zero blood culture contamination rates, up to a 31% reduction in vancomycin days of therapy, and as much as a 12-fold decrease in false-positive CLABSIs over extended periods of time.^2,3,4

"We are excited to support Magnolia Medical's growth plan as the company leverages its intellectual property portfolio to accelerate the expansion of the Steripath hospital customer base. We look forward to watching the company's progress in its mission to eliminate sepsis misdiagnosis," said Andy Acker of Janus Henderson Investors.

Jefferies LLC served as an advisor to Magnolia Medical.

About Magnolia Medical Technologies

Magnolia Medical Technologies develops, manufactures, and markets innovative blood and bodily fluid collection devices to facilitate significant improvements in the accuracy, consistency, and predictability of critical laboratory tests. Magnolia Medical invented and patented the Initial Specimen Diversion Technique (ISDT™) and Device (ISDD®) for blood culture collection and contamination prevention. The company has amassed an intellectual property portfolio, including more than 100 issued method, apparatus, and design patents with more than 70 additional patent applications pending. For more information, visit www.magnolia-medical.com.

Indicated to reduce the frequency of blood culture contamination when contaminants are present, compared to standard method controls without diversion.
Date on file.
Nielsen LE, Nguyen K, Wahl CK, et al. Initial Specimen Diversion Device® reduces blood culture contamination and vancomycin use in academic medical center. J Hosp Infect. 2021;117. doi:https://doi.org/10.1016/j.jhin.2021.10.017.
Tompkins LS, et al. Getting to zero: impact of a device to reduce blood culture contamination and false-positive central line-associated blood stream infections. Submitted to Clin Infect Dis in December 2021.

SOURCE Magnolia Medical Technologies