Spurred by New Law, ConsortiEX Snags $2.5M for Supply Chain Software
In 2012, a fungal meningitis outbreak at the New England Compounding Center, a pharmacy in Framingham, MA, ultimately claimed the lives of 64 patients. The cause of their deaths is believed to be contaminated steroid injections they received from the pharmacy, according to reporting by Newsweek and other publications.
The following year, President Barack Obama signed the Drug Quality and Security Act. One of that law’s components, known as the Drug Supply Chain Security Act (DSCSA), is aimed at creating an electronic system to help users identify and trace prescription drugs as they move between pharmacies, hospitals, and other links of the supply chain.
Since then, companies have been racing to create software healthcare organizations can use to ensure they’re complying with the DSCSA, which took effect in November. They include North Reading, MA-based TraceLink and TrackTraceRx, based in Orlando, FL.
Another is Milwaukee-based ConsortiEX, which recently raised $2.5 million from 19 investors, according to a regulatory filing that was made public on Thursday. The startup has raised more than $3.3 million since 2014, SEC documents show.
Software aimed at helping healthcare workers monitor compliance and keep better track of drugs and drug distributors is “fundamentally changing the way hospitals manage counterfeit products that find their way into the supply chain,” says Neal Long, co-founder and CEO of ConsortiEX.
Long says some of the new financing will be used to hire more salespeople. He declined to reveal the startup’s current headcount, which stood at 11 as of July 2015.
The New England Compounding Center, where the meningitis outbreak occurred, is what’s known as a compounding pharmacy. These are places authorized to formulate and sell drugs that meet the specific needs of an individual. ConsortiEX’s software is designed so that it “documents, manages, and tracks all the elements in the compounding process,” Long told Xconomy in 2014.
ConsortiEX’s customers include networks of hospitals and clinics in Wisconsin, Massachusetts, and Texas. The startup went through Boston’s MassChallenge accelerator in summer 2014.
Long declined to say what ConsortiEX’s revenues were in 2015, or what valuation his company received as part of the latest funding round, which it’s calling a Series A.
Serra Ventures, of Champaign, IL, said in July that it contributed $750,000 of the total. Numerous Milwaukee-area individual investors participated as well, Long says. One was Michael Cudahy, an entrepreneur who is perhaps best known for his work at Marquette Medical Systems, which was sold to GE in 1998.
“We’re grateful for the support we’ve received in the Milwaukee area,” Long says. “Companies that want to grow need support from the local business community and from institutional investors. That’s really important to us.”