J.P. Morgan forms life sciences/healthcare VC group; virtual care Ovatient formed by MUSC Health, MetroHealth; Oracle’s putting lots of KC office space on market

November 2, 2022 | by

Some more good news in healthcare–maybe a bit of spring in autumn?

J.P. Morgan is setting up a new venture capital team to invest in life science healthcare companies. The new group, Life Sciences Private Capital, will sit within J.P. Morgan Private Capital. Investments will be in early and growth-stage companies developing novel therapeutics and technologies in several target areas including genetic medicine, oncology, neurodegenerative disease, rare diseases, autoimmunity, AI/ML platforms, metabolic diseases, and neuropsychology. Heading the group is Dr. Stephen Squinto as Chief Investment Officer and Managing Partner. He joins from OrbiMed Advisors, and previously co-founded and built numerous biotechnology companies including Alexion Pharmaceuticals plus being a scientific founder of Regeneron Pharmaceuticals. Also joining are Dr. Gaurav Gupta and  Anya Schiess with experience at OrbiMed and Healthy Ventures respectively, as well as a prestige group of advisors. JPM press release, Becker’s. 

The Medical University of South Carolina health system (MUSC Health) and The MetroHealth System (MetroHealth) are partnering in a joint venture for virtual and in-home care. From the press release, Ovatient is designed to improve the care experience by linking patients to the delivery of virtual and in-home care via a platform that connects to health systems and acute or procedural care, eliminating fragmented care experiences. The JV also intends to sell the platform to other providers. Other health systems are either joining forces with virtual care providers and AI platforms or forming their own, such as NYC’s Hospital for Special Surgery with their RightMove virtual MSK spinoff, and Northwell Health. MetroHealth release, Mobihealthnews

And if you’re a company looking for luxe office space, Oracle’s putting a lot of it on the market. Granted, it’s in Kansas City, but it’s two buildings: the former Cerner World Headquarters in North Kansas City and a separately located Realization Campus in KC. Current onsite employees will be consolidated at the fairly new Innovations Center in KC by 30 November, which has a substantial 2 million square feet of space. The health clinic part of WHQ will close as well, but not the data centers–at least for now. (A gargantuan task!) Both WHQ and Realization, according to the Oracle Cerner thread on Reddit, have been largely unused since 2020, the pandemic, and Cerner’s transition to a hybrid workforce. Cerner had from 2021 been reducing KC-area office space which had been funded locally by $170 million in sales tax and revenue bonds. The downside is once moved, how many will remain? Oracle reportedly has been considering $1 billion in cuts and is busily refinancing its debt incurred by the Cerner purchase [TTA 27 Oct]. Ridding itself of empty office space is actually a good start, versus cutting heads–a bad move as Oracle tries to save Cerner at the VA and MHS. HealthcareITNews, HISTalk, KSHB 41

A spooky ‘good news’ roundup: AtlantiCare rolling out Orbita AI, Health Wildcatters Pitch Day, RapidSOS, HealthJoy fundings and more

November 1, 2022 | by

This Editor has noticed the gloomy tone of the past few weeks’ postings. She has decided to ‘accentuate the positive, eliminate the negative” (in Johnny Mercer’s words) using the last few hours of Halloween (boo!) with nothing but Good News.

A health system is actually implementing an AI platform! AtlantiCare, which is based in southern New Jersey, will be rolling out the Orbita virtual artificial intelligence platform across its system, which includes more than 100 locations across Southern New Jersey. Orbita’s capabilities can link patients with virtual assistants and AI to streamline routine tasks such as scheduling, patient reporting, medication adherence, and care management. It also recognizes and translates more than 100 languages. According to Becker’s, Orbita’s functions will be rolled out in stages with the digital ‘front door’ going live in September and patient outbound communication capabilities in 2023.

Dallas’ Health Wildcatters finishes up its 2022 cohort with an evening Pitch Day at their new HQ on Thursday 10 November. Their 11 startups will present starting at 4pm in two sessions. With two networking sessions, the festivities start at 3:30 and go to 8pm. Health Wildcatters has relocated to a 23 acre campus, Pegasus Park, targeted to entrepreneurs and startups in biotech and healthcare to encourage development and collaboration. More information and registration links

And fundings are actually happening–for companies with an established success story + track record–and those at a very early stage where there’s promise, the risk is shared, and the investment is modest. 

  • RapidSOS raised $75 million in a venture round. It developed an emergency response platform that provides first responders with real-time health and location data from connected devices, apps and sensors. It supports 5,200 Emergency Communications Centers, protecting 95%+ of people in the US, across 150 million emergencies annually. Night Dragon Security led 11 other investors. Funding to date is over $280 million.
  • HealthJoy, a digital employee benefits platform for healthcare, raised $60 million in Series D funding from nine investors led by Valspring Capital. Their app bundles telemedicine, wellness, dental, advocacy, medical bill review, EAP, prescription savings, behavioral health, price transparency, MSK, chronic care, mental health, and others. FierceHealthcare
  • Pediatric telehealth provider Hazel Health closed a Series C1 of $51.5 million led by Bain Capital. Hazel partners with school districts to offer virtual care clinics inside the school nurse’s office. It claims to be the only company in school-based telehealth.
  • Others: Navina (AI, $22 million), Galen Robotics ($15 million), Midi Health (menopause virtual clinic, $14 million), and Lumata Health (virtual practice management for ophthalmology, $4 million seed)  Mobihealthnews

Also:

  • Valera Health raised $44.5 million in a growth equity financing round led by Heritage Group. Additional participants are Horizon Healthcare Services and Cigna Ventures, joined by seven previous investors. Total funding is over $71 million. Valera is a specialized virtual mental health platform for high-acuity patients with serious mental illness and severe depression with live health coaches to find a therapist or doctor, and creates a team with multiple clinicians. Their services can be used by adults (18+) and children, adolescents, and teens (6-18)  Mobihealthnews

VillageMD considering $5-$10B merger with Summit Health provider group: reports

November 1, 2022 | by

Two large provider groups, VillageMD and Summit Health, reportedly are considering a merger. VillageMD, which now is majority owned (62%) by Walgreens Boots Alliance, has 342 total primary care clinics in 22 southern and northeastern markets covering 15 states, with 152 co-located with Walgreens eventually increasing to 200. Summit Health has 370 locations in five states, including specialty practices and CityMD urgent care locations. Summit Health is majority owned by Walburg Pincus.

This reinforces a trend of cross-healthcare sector buys, consolidations, and control. VillageMD’s move from a co-location deal with Walgreens to majority ownership (but controlled by an independent board) was one step starting during the pandemic in July 2020 [TTA article series here].

  • Amazon agreed to acquire OneMedical (1Life) for $3.9 billion at the end of July, and abandon Amazon Care, though now running into FTC/DOJ review headwinds with a second request for information [TTA 15 Sep].
  • CVS Health has made no secret of its desire to acquire primary care, provider enablement, and home health companies (Signify Health, also under DOJ scrutiny), but apparently has abandoned or put on hold a deal with Cano Health [TTA 21 Oct].
  • Walmart continues to go direct by opening full-service clinics, announcing the expansion of 16 based in the Tampa, Jacksonville, and Orlando areas in 2023 (Healthcare Dive, Healthcare Finance News).

Valued at $12.9 billion and with Walgreens’ backing, VillageMD has the ‘go big or go home’ resources to execute Walgreens’ version of this strategy.

Why this very well may happen. The two do not overlap (except in NJ) on markets. VillageMD is primarily owned and affiliated primary care practices; Summit Health specialty practices (neurology, chiropractic, cardiology, orthopedics, dermatology) and CityMD urgent care. VillageMD has successfully mastered value-based care models in Medicare and entered advanced Medicare ACO models early and vigorously (Editor’s information); Summit Health primarily is fee-for-service with some participation in value-based programs. More to come. Bloomberg, Becker’s, and a very big hat tip to research from Jailendra Singh of Truist Securities  (paper here)