It might be too early to call Bellevue, WA-based Talyst a success, but its story certainly makes for a compelling case study. The company closed $8 million last month from existing investors OVP Venture Partners, Ignition Partners, and AIG Global Investment Group, but didn’t make an announcement. Why? Things have been too busy.

“We raised money to grow new markets,” says Talyst CEO Carla Corkern, who has just been named chairman of the board. “That’s what VCs like to invest in.”

Talyst is known for making software that helps pharmacies manage the flow of medications in hospitals and clinics. The idea is to automate the process of tracking drug inventory and filling prescriptions using smart management software and a touch-screen kiosk interface—sort of like going to a vending machine—and to do it in a safe, secure, and efficient way. The new markets Corkern wants to expand into are nursing homes and assisted living facilities, as well as prisons and other correctional facilities. Those facilities have many people who need medications, but may not have a pharmacist on-site, so they need an efficient way for a nurse or caretaker to package and dispense meds to patients.

“The long-term care market is a $2 billion market for facility-based automation which has a strong return on investment—needed for these times,” says Corkern.

To appreciate the significance of this new market strategy, you need to know the history—much of which occurred before Corkern joined the company. Talyst was founded in 2002 as Integrated Healthcare Systems, and raised some $29 million in venture funding in 2005 and 2006 (a total of $37.5 million prior to the latest round). By 2007, it had become a market leader in managing medications for hospital pharmacies.

But there was trouble brewing. Talyst had grown to more than 170 employees and wasn’t bringing in enough revenues. As Corkern explains, the company had 45 percent market share in hospital pharmacies, but that market was maturing (it is now more than 50 percent captured by existing players). So in 2007, Corkern was brought on board to focus on business development, and she was soon promoted to chief operating officer. She had previously served as chief operations officer for Vykor, an aerospace supply-chain company in Renton, WA. Having lived in Texas, she was also familiar with regulations involved in long-term care—particularly around the process of dispensing medications remotely, in which Texas was the national leader. “I came in to focus on diversifying the business and take it into new markets,” Corkern says.

As is often the case, the company had to take a step back before it could move forward. In 2008, Talyst laid off a large number of employees—it is now down to 102—and replaced outgoing CEO …Next Page »

Comments (4) | Reprints | Share:        

It’s not fun making mistakes. On Wednesday, we published a story about a class-action lawsuit being brought against Webloyalty, Fandango, Priceline, and others. We’re proud of our work on the piece and, as always, tried hard to get the story straight, but yesterday evening several potential inaccuracies were brought to our attention. We investigated further and found that we had indeed made errors on some of the details. To be clear, we stand behind the overall story, but we believe in owning up to our mistakes, so we’d like to set the record straight on the points we got wrong:

— Due to an editing error, we identified Petco.com as one of the defendants in the lawsuit. While Petco is among Webloyalty’s partners (several of whom are indeed named in the lawsuit), it is not a defendant in the case.

— Due to a miscommunication between the reporter and one of the attorneys in the lawsuit, the article incorrectly described the procedural posture of the case. Specifically, we reported that both a Webloyalty motion to dismiss the case and a Webloyalty motion for summary judgment had been denied by the court. In fact, Webloyalty did not make a motion to dismiss the lawsuit. It filed a motion for summary judgment at the outset that was terminated by the court without prejudice so the parties could take discovery. Webloyalty has the right to refile that motion.

We sincerely regret these errors and have corrected them. You can find the revised article here.

Comments (7) | Reprints | Share: