SC Launch! funding helps reel in med-tech company

Sabal Medical, a Seattle, Wash.-based medical technology company, has relocated to the Lowcountry after receiving a $150,000 investment from the South Carolina Research Authority's SC Launch! program.

Bill Park, Sabal's president and CEO, said the relocation was a strategic move for the company. "If you look at the long-term care market and the acute care market in this area, it makes a lot of sense," Park said. "There are a lot of hospitals in this region, and for a relatively young company like ours, that's a good market to be in."

"Besides, in the seven years my partner and I have been in the industry, we spent most of our time traveling to the East Coast. It'll be a lot easier to be here in the same area with our customers."

Sabal provides automated medication carts and bar code verification software designed to ensure proper administration of medicine. The carts and accompanying software control access to medication storage on the hospital floor. They are connected to a secure computer system that is linked to the hospital, providing information about the patient, the orders and the medical staff administering the medication, Park said.

Sabal's product, Park said, is about patient safety. "Medication errors cost an extra $4,000 per admission on average, and 38 percent of medication errors are at the bedside where the nurse administers the medications to the patient," he said. "What we have is barcoded medication safety software built into the cart. There are a lot of nursing carts on the market, and there are third-party software providers, but there isn't a product out there that integrates the two. That's what we're doing."

Each cart is designed for six patients on a typical medical-surgical unit or for one to two patients on an intensive care unit. A fully operational system in a 300-bed hospital would need 50 carts, Park said, adding that each of Sabal's carts with software costs about $15,000.

Greenville Hospital System will be the test site for the technology. The company is also in discussion with hospitals in Florida and Kentucky, including the VA hospital in Lexington, Ky.

When Park settled on Charleston as a site, the first person he contacted was Ernest Andrade, executive director of the Charleston Digital Corridor. "Ernest put us in touch with the Charleston Angel Partners, and we're currently involved with them, moving through the due-diligence process for funding," he said. "Then Launch! appeared and we went after that funding."

SCRA's SC Launch! program links entrepreneurs with intellectual property and money, investing up to $200,000 per company in the hopes of generating jobs and stimulating the economy. "By enticing high-impact technologies like Sabal Medical to relocate to the state, SCRA is fostering the growth of the knowledge economy," said Bill Mahoney, SCRA's CEO. "With the economics around patient safety, the 'soil conditions' around health sciences have a fairly automatic leverage point. This seed investment will continue to pay dividends by spurring growth and development in biotechnology."

Even though Sabal Medical has received $150,000 from SC Launch!, there is actually a commitment for the full $200,000 that most Launch! companies receive, Park said. The remaining $50,000 will be given after the company receives a certain amount of funding outside of the Launch! money. "We're seeking close to a million (dollars) in the first round," he said. "So far we have about $425,000 in committed investment."

In terms of finding office space, Park said Andrade had been instrumental in securing "incubator" space where the company could establish itself during its early-stage growth. "Our 'touchdown space' (at the Charleston Digital Corridor) is completely full, so I looked around and found another company that was moving into a space that was basically too big for them," Andrade said. "So Sabal will be leasing some of the extra office space. It's a perfect fit for both of them. The larger company gets some revenue from space it doesn't need just yet, and Sabal enters the Charleston market in prime space." Park preferred not to mention the exact location, as he is still negotiating specifics of the lease.

Sabal will begin hiring in November. Plans for 2007 include hiring a mix of software engineers and light production workers and looking for a facility or land on which to build one, Park said. "We'll need at least 15,000 square feet," he said. "We're looking along Clements Ferry Road and possibly Daniel Island, but we're not sure yet. We'll be in touch with some commercial real estate people, and we'll rely on people like Ernest to steer us in the right direction."

The company hopes to ramp up to about 50 or 60 employees by the end of 2009, Park said."That may sound like aggressive growth," he said. "But actually, we think it's a bit conservative on the sales side."

Park pointed out that Sabal's relocation to the area could have benefits for the rest of the state as well. "When we get to our peak, our volumes still won't be high enough to do overseas fabrication," he said. "So not only are we building resources for assembly here, but most likely we'll be buying all our parts from companies in South Carolina. Although we're technically a software company, we're also a very brick-and-mortar operation."