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February 272019

Water Street Announces New Investment

Chicago — Water Street announced today that it has completed a new investment in Irvine, Calif.-based diagnostic solutions company, Pathnostics. Water Street’s team, which has years of experience in the diagnostic and laboratory services sector, will partner with the fast-growing company to invest in and expand its innovative technology and portfolio of products.

Founded in 2014, Pathnostics specializes in diagnostic tests and services across a range of therapeutic areas, including urology, women’s health, gastroenterology and cancer. The company has grown rapidly in recent years as increasing numbers of urologists have adopted its Guidance UTI test, which simultaneously diagnoses and guides antibiotic treatment for complex, recurring urinary tract infections. This test utilizes proprietary technology featuring combined phenotypic sensitivity and genotypic resistance to conquer unresolved infections and rapidly provide therapeutic guidance to physicians. Studies show that Pathnostics’ patented technology has strong potential to reduce hospitalizations and improve patient satisfaction – a significant need and priority across the health care industry.

“Pathnostics’ one-of-a-kind technology is a breakthrough. Its proven ability to swiftly deliver highly accurate therapeutic guidance enables physicians to immediately treat complex and chronic infections. We have a significant opportunity to leverage this unique technology across medical specialties to substantially improve patient care and reduce the cost of problematic infections. We’re excited to be Pathnostics’ partner as they develop new tests and expand their product portfolio into new therapeutic areas, and continue their impressive growth,” said Scott Garrett, senior operating partner with Water Street and former chairman and CEO of Beckman Coulter.

Dave Pauluzzi, co-founder of Pathnostics, will continue to lead the company as CEO. Mr. Pauluzzi previously collaborated with Water Street when he was president and CEO of PLUS Diagnostics to grow the company into a national anatomic pathology leader.

“I’m thrilled to be working again with the Water Street team,” said Mr. Pauluzzi. “Their industry expertise and network of resources will give us the ‘lift’ we need to take Pathnostics to the next level to benefit our customers and achieve our long-term vision of building Pathnostics into a diagnostic solutions leader.”

Pathnostics marks Water Street’s fifth investment in the diagnostics sector and first new investment of 2019. Since its founding in 2005, the health care firm has completed more than 100 strategic transactions to build 30 market-leading companies in key sectors of health care. Water Street targets investments ranging from $50 million to $500 million in four health care sectors: specialty distribution, medical and diagnostic products, health care services and pharmaceutical products and services.

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