News Roundup of acquisitions, funding: Health Catalyst-Vitalware, Change Healthcare-Nucleus.io, Medtronic-Companion Medical, Cecelia Health; Proteus Health sale contested, but sold (updated 20 Aug)

Spin that lasso, round up the dogies, because we’re going to the rodeo! Data and analytics company Health Catalyst is acquiring Vitalware, which provides ‘chargemaster’ revenue workflow optimization and analytics SaaS technology to healthcare organizations. The deal is expected to come in at about $120 million with a $30 million earnout, funded by stock and cash, and close later this year.  Health Catalyst is on a buying tear, having acquired Healthfinch, a prescription refill management and visit planning platform to close care gaps, for $40 million in cash and shares in July. Health Catalyst went public in July 2019 and is trading at a market cap of nearly $1.3 bn (Unicorn Status isn’t what it used to be!). They’ve also inked a partnership deal with Northwell Health, the largest provider in New York State, to expand Northwell’s enterprise data and analytics capabilities with EHR integration. Health Catalyst releases on Vitalware, Healthfinch, and Northwell Health. Also FierceHealthcare.

Updated. Another major 2019 IPO, Change Healthcare, is acquiring Nucleus.io, a  cloud-based imaging and workflow platform, from San Diego-based developer NucleusHealth. This is a significant move, fitting into their Enterprise Imaging area and accelerating their implementation of a complete cloud-based, end-to-end solution within their Enterprise Imaging Network. Nucleus.io serves over 7,500 organizations and will add to Change Healthcare’s imaging customer base. Change is acquiring the Nucleus.io technology and team. NucleusHealth will continue to operate under its own name; they also operate a teleradiology platform, StatRad. Terms were not disclosed. Release. HealthcareITNews (Updated to clarify that the Change Healthcare acquisition is the Nucleus.io technology and not NucleusHealth the company)

Medtronic, which insiders dub the 9,000 lb. elephant of medical devices and remote patient management, has been quiet of late, but that doesn’t mean the elephant isn’t moving and sitting where it wants to sit. Continuing to build in diabetes care, they have just acquired Companion Medical, developer and marketer of the InPen, a insulin pen with a companion app, which was FDA cleared in 2016 and remains the only ‘smart insulin pen’ system. Eli Lilly and K2 Health Ventures were Companion’s major funders. Closing is expected within two months. Terms were not disclosed. Medtronic is clearly constructing a closed-loop diabetes management system through acquisitions such as Companion as well as diet-management startups Klue and NutrinoRelease, Mobihealthnews

And in diabetes management, Cecelia Health (the renamed Fit4D), scored a healthy $13 million in Series B funding. Rittenhouse Ventures and Endo Investors co-led the round, with participants Boston Millennia Partners, SustainVC, G100 Capital and others, for a total of $22.4 million in funding (Crunchbase). Fit4D developed clinical virtual coaching with certified diabetes educators, and partners with health plans, self-insured employers, medical device and pharma companies. The funding will go to developing a first-in-kind ‘Virtual Clinic’ for diabetes, which will offer continuous glucose monitoring (CGM) training, education on medication adherence and lifestyle and behavior change, mental health screening and counseling. These will be then supported by algorithms recommending necessary dosage and titration changes that will be reviewed and approved by Cecelia Health’s Certified Diabetes Care and Education Specialists (CDCES) and endocrinologists.  ReleaseMobihealthnews  A few days before the funding, Cecelia announced their participation with the Jaeb Center for Health Research Foundation in Tampa in their research to develop a virtual specialty clinic model, funded by a $5 million grant from the Helmsley Foundation. Release

Updated for Proteus sale. The troubled ‘smart pill’ pioneering company and one-time unicorn Proteus Digital Health, which filed for Chapter 11 (reorganization) bankruptcy on 16 June [TTA 17 June], planned to exit it with a $15 million ‘stalking horse’ deal with Otsuka Pharmaceuticals in advance of a bankruptcy auction. ‘Stalking horse’ deals set a floor at an auction and essentially set a minimum price. Investors, including Novartis and two Hong Kong funds, contested that fire sale earlier this week, claiming the sale to Otsuka was undervalued and if the IP and other assets were divided, a higher price would be obtained. One could understand their feelings, as Proteus raised nearly $500 million from them which essentially has vanished.

On Wednesday 19 August, the US Bankruptcy Court for the District of Delaware approved the sale to Otsuka, which was filed on Thursday. A key part of the hearings was Proteus’ investment banker, Raymond James & Associates, fruitlessly reaching out to over 240 potential buyers. What scared them off was Proteus’ burn rate–between $2 million and $2.5 million a month–with no clear prospect of positive cash flow or profitability (the latter quite elusive even in public companies). The purchase by Otsuka, which was deemed fair in the ruling with the opportunity for others to provide higher offers, covers information technology assets, intellectual property, and equipment, including equipment used to design and manufacture wearable sensors. Related court documents.

Otsuka was Proteus’ last major partnership for Abilify MyCite that ended suddenly in January. From the case documents schedule, this will be wrapped by end of September. FierceHealthcare 12 Aug, 27 July    STAT+ (paywalled) 20 Aug, HealthcareITNews

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