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Xenex Adds $4.8M for Hospital Trial Program of Germ-Zapping Robots

Xconomy Texas — 

San Antonio — [Corrected 10/9/18, 4:19 p.m. See below.] Xenex Disinfection Systems has raised a $4.8 million round of debt funding to pay for a program that lets hospitals and other healthcare facilities use its germ-zapping robots on a trial basis.

Xenex sells hospitals a technology that uses an inert gas, pulsed xenon, to create high-intensity ultraviolet light that rids hospital rooms of tiny bacteria and viruses that can potentially cause deadly infections. The San Antonio company’s new program will provide the healthcare facilities with its robots, called LightStrike Germ-Zapping Robots, and will train workers there to use it, according to CEO Morris Miller.

If the machines achieve mutually agreed upon reductions in infection rates, the hospital will pay Xenex for the machine, Miller wrote in an e-mail. The company recommends operating the robot in a room for two four- to five-minute sessions, according to its website, though it can be effective in as short as two minutes under certain conditions in the operating room. [Corrected to clarify recommended operating time.]

Multiple studies have examined the efficacy of Xenex’s product, including one published in May by the U.S. Department of Veterans Affairs that recommended hospitals integrate the robots into daily operations. Researchers from the VA found that two hospital rooms cleaned using Xenex’s device had a 75 percent lower count of methicillin-resistant Staphylococcus aureus (MRSA) than those that were cleaned manually. The aerobic bacteria colony counts were reduced by 84 percent, according to the study.

The robots cost around $100,000 each, Miller said in 2015, and can lower the counts of other infection-causing bacteria, including Clostridium difficile (C.diff) and carbapenem-resistant Enterobacteriaceae (CRE). The new program was launched to accommodate hospitals that want to test out the technology before they buy it, Miller said.

“Hospitals have limited capital and must prioritize where to spend it,” Miller wrote. “We launched the Trial to Outcomes program because we know that our proprietary room-disinfection technology works and we want to partner with hospitals to find a way to supplement the hard work their cleaning teams are doing.”

The company raised debt financing, rather than venture funding, from a group of earlier investors who saw that Xenex has no debt and wanted to avoid diluting their holdings with another equity financing round, Miller said. Xenex raised a $38 million equity funding round in 2017, which brought its equity funding total to $94 million since its founding in 2009.

Miller declined to name the investors who provided the new debt funding. Some of its earlier investors include Piper Jaffray Merchant Banking, the private equity arm of the Minneapolis -based investment bank, Malin Corporation, Battery Ventures, Targeted Technology Fund II, RK Ventures, and Tectonic Ventures, a Newton, MA-based venture firm that Miller co-founded in 2016.

Healthcare-associated infections are relatively common, according to the Centers for Disease Control and Prevention. About 5 percent to 10 percent of patients get one, or about 1.7 million per year, which results in 99,000 deaths annually, the CDC reports.