News roundup #2: why Walgreens is considering selling to a PE, December fundings, 2024’s surprises, M&A ’25 predictions, Transcarent buying Accolade for $621M

Why would Walgreens sell out to a private equity investor, reportedly Sycamore Partners? This news leaked early in December to the Wall Street Journal that this PE would either buy Walgreens Boots Alliance (WBA) in whole, in parts, or with partners [TTA 10 Dec 2024]. This MedCityNews article gathers the speculation from multiple financial executives, and the answer is a resounding Maybe.

  • Primary care was a losing bet–and their retail pharmacies are challenged by new models like Amazon Pharmacy and Cost Plus.
  • It will take about $9.2 to $10 billion, which is a lot for Sycamore to pony up. But it’s a bargain from what PE giant KKR offered in 2019– $70 billion.
  • Sycamore may have competition for buying WBA.
  • The 12,000 store network is now seen not as an asset, but a liability, not only for pharmacy but also for retail goods.
  • Sycamore may be more interested in the retail and e-commerce sides of Walgreens versus healthcare. For instance, WBA company Boots in the UK has leveraged its beauty business to nearly the prominence of health in their stores.
  • A private company may have more power to swiftly make the changes that Walgreens needs, versus a company having to report quarterly to shareholders. 

There was the usual rush to announce fundings by December’s end, a refreshing change from 2023’s end. MedCityNews helpfully rounded up five of the last-minute closings:

  • Already noted: Oura’s $200 million plus funding for a Series D from Dexcom ($75 million) and Fidelity Management. Our earlier reporting noted total financing at $223 million and the valuation at $5 billion.
  • Cleerly’s $106 million Series C led by Insight Partners. Cleerly developed AI-assisted detailed phenotyping of coronary artery disease.
  • Remodel Health gained $100 million in a funding led by Oak HC/FT and Hercules Capital. Remodel works with employers and employees to build and access Individual Coverage Health Reimbursement Arrangement (ICHRA) plans.
  • Cala Health raised $50 million from Vertex Growth Fund and Nexus NeuroTech Ventures. Cala is a bioelectronic medicine company which developed FDA-cleared, noninvasive devices for hand tremors.
  • Soda Health’s $50 million Series B, led by General Catalyst, is in the hot sector of ‘food as medicine’. Soda provides a ‘smart benefits’ card to use at approved retailers for food, health products, and pharmacy benefits.

2024 had its share of surprises in this two-part Mobihealthnews roundup. No surprise for our Readers in that GLP-1 drugs for weight loss went to radioactive-level hot (but this Editor predicts a collapse in 2025). The failure of retail clinics such as Walmart Health and VillageMD surprised many in the industry–as well as Optum shuttering its telehealth business. Developing: menopause and autoimmune health (and their relationship)–and food as medicine. On the insurance side, the troubles of the Medicare Advantage health plan model multiplied, not moderated. And AI? On top of everything, but you maybe shouldn’t develop your own LLM. Part One, Part Two

Predictions for 2025 mergers and acquisitions center on consolidations. There’s little foo-foo or froth in this Mobihealthnews article– instead, lots of New Reality. Many pandemic-born startups will die quiet deaths in sales, shotgun marriages, and shutdowns. Much caution in any M&A. The emphasis is on interoperability, which is widely defined as acquirer-acquiree and a clearly presented integrated value proposition to customers. Their industry leader panel cannot agree whether M&A will accelerate as a result of changes at FTC (Lina Khan’s departure and a new chair) or slow down. And at least one leader believes that Medicare Advantage will stabilize and recover.

But one buyer plays it high and wide in ’25–the deep-pocketed Transcarent, agreeing to buy Accolade for $621 million in 2025’s First Big Deal. Accolade is also in enterprise care navigation, as well as providing virtual primary care, specialist consultations, and patient advocates. It went public on Nasdaq in 2020. Transcarent’s offer is $7.03 per share in cash, an approximately 110% premium over the company’s closing stock price yesterday 7 January. The funding is coming from General Catalyst (!) and Glen Tullman’s 62 Ventures. Accolade will go private at the closing, expected to be Q2 following shareholder and regulatory approvals, and be integrated into Transcarent. The combined Transcarent will have 1,400 employer and payer clients. Release, Healthcare Dive

News roundup: Buddi’s £500M LSE float, Accolade to buy PlushCare for $450M, Teladoc adds chief innovation officer, Tyto Care’s Italy expansion

Buddi going public later this year. Something we missed and found (quite by accident) was that the Buddi personal alert wearable will be floated on the London Stock Exchange later this year. According to the report in SkyNews, CEO and founder Sara Murray has appointed Zeus Capital to manage it. The value is rumored to be up to £500 million and will be a great reward for Ms. Murray and her other early investors. The bands, which connect to smartphones or a wireless-connected clip, then to pre-set connections or their 24/7 support, retail for up to £248. Buddi is reported to be used by more than 80 percent of local authorities in the UK, UK police forces for domestic violence cases and witness protection, lone worker situations, plus government customers internationally. Buddi also designs and assembles their Buddi units in the UK. Also City A.M. 

Accolade, a health benefits navigation provider, announced a definitive agreement to purchase one of the smaller telehealth players, PlushCare, for a plush price of $450 million, composed of $40 million in cash, $340 million in Accolade common stock, and up to (the usual) additional $70 million of value payable upon the achievement of defined revenue milestones following the closing, expected in June. Accolade, which itself went public on NASDAQ in July, raising $220 million, then in October floated additional shares to raise $221 million, has been on a telehealth acquisition tear of late. In March, they closed their acquisition of virtual second medical opinion provider 2nd.MD for $460 million. PlushCare will enable Accolade to directly offer primary and mental health care telehealth to its members. According to Steve Barnes, chief financial officer at Accolade, their addressable market will increase nearly five-fold to more than $200 billion. One wonders whether their existing relationships with Teladoc and Livongo will continue.  Release.  Also HealthcareDive and FierceHealthcare.

Teladoc adds a chief innovation officer. Claus Jensen, PhD comes from Memorial Sloan Kettering Cancer Center, where he served as chief digital officer and head of technology. His purview will include product innovation, information systems, health informatics, and data products. Previously, he was with Danske Bank, IBM, and chief technology officer of CVS Health-Aetna. Release, Becker’s Hospital Review

TytoCare advances further into Italy in a partnership with Multimed srl, a local medical device company. The partnership will develop the market there with local providers, hospitals, elder care facilities, independent physicians, and pharmacies, as well as at-home monitoring. Multimed is a multi-line distributor of surgical devices for robotic surgery, endoscopy, laparoscopy, orthopedics, sanitization/sterilization, and similar. Tyto earlier explored the Italian market in a partnership with the ASL of Vercelli hospital group, where physicians monitored and treated elderly and pediatric COVID-19 patients, performing pulmonary, cardiological, and dermatological telehealth visits. Release