Talyst, the Bellevue pharmacy automation company, has landed an additional $8 million in venture funding from existing investors AIG, Ignition Partners and OVP Venture Partners. The 7-year-old company, which is on track to reach profitability this year, plans to use the funds to expand into the new markets of serving prisons and assisted living facilities, said Ron Strandin, executive vice president of sales, marketing and business development.

Historically, Talyst has sold its pharmacy automation technologies to hospitals. And while that market represents 80 percent of the company's business, Strandin said the hospital market is pretty "flat." As a result of that slow down, the company trimmed its staff last year from about 175 people to its current level of 102.

"Our advantage is we have a big back log that we have built up that we can ride for another year and we have a good strong recurring revenue stream, which is from support contracts ... in our hospital business," said Strandin. "It is not like a software business where you fall off a cliff and you are dead. We've got this huge runway that we can see way out in our business because of our backlog."

So far, Talyst has deployed the drug dispensing technology at nine prison facilities in San Bernadino County. It also has pilot customers in the corrections industry in Pittsburgh and New York. 

In the long-term health field, the company plans to have test customers trying out the system at about 14 long-term health care locations. It has about 400 customers altogether.

Talyst competes against McKesson and AmerisourceBergen in the hospital market and Advanced Pharmacy in the new areas where it is expanding. There's a big difference between the hospital and long-term care and corrections markets, Strandin said.

"The difference is, in a hospital, a pharmacist checks every dose, and in a nursing home nobody checks it, so it better be perfect," he said. "I mean, a nurse checks it, but your level of accuracy has to be off the charts and the level of error checking and sensoring and that stuff makes it a totally different application."

Talyst -- which appointed CEO Carla Corken as chairman this week -- has raised a total of $45.5 million to date. It plans to be profitable for the full year of 2009, said Strandin.

I asked Strandin to explain what the company did for the layperson who might not be familiar wtih the technology, and he offered this funny explanation.

"We are kind of a logistics company," he said. "We just happen to get a pill perfectly from point A to point B. But if it were a can of corn or a can of peas or a freight car it wouldn't matter. We just happen to move something from one place to another perfectly."

[Hat tip to Xconomy]