TTA’s Realignment Autumn 6: Theranos’ Holmes gets 11 years on fraud, Cerebral ex-CEO’s legal fishing, Amazon Clinic and Primasun debut, Maven rounds up $90M, Sema4 ditches women’s health + 500

 

 

Weekly Update

Legal matters led this week, with Friday’s sentencing of Elizabeth Holmes to over 11 years in Federal prison and Cerebral’s ex-CEO fishing for evidence to use in legal actions. Amazon unveiled Clinic, a low-budget messaging platform for common condition diagnosis. Women’s health Maven rounded up $90M but Sema4 exited that testing field, losing 500. 

Breaking–The Theranos denouement: Elizabeth Holmes sentenced to 11.25 years with an investor loss of ~$121 million (Loss to be finalized at later date, sentence to start 27 Apr 2023)
Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing (Set up for legal action–or more settlement to go away)
The Theranos denouement: ‘Humble, hardworking’ Elizabeth Holmes sentencing Friday; prosecution and defense paint different pictures (updated)
News briefs: ResMed-Verily’s Primasun sleep solution; Maven Clinic’s $90M Series E; Mount Sinai genomics spinoff Sema4 lays off additional 500, exits women’s health
Yes, Virginia, there is an Amazon Clinic, after all; non-face-to-face consults for common conditions (Amazon’s Chevrolet–or Yugo–entry?)

VillageMD makes a quick, pricey deal for Summit Health. Many announcements on new products and partnerships. We stop in Singapore for funding while Oracle restructures its kitty. Amazon let a product ‘slip’. A rationale for a Transcarent-Teladoc tie-up. Telecare progress in Wales. Assessing where are we going, what are we doing in health tech funding after all this….realigning.

Short takes: Will there be an Amazon Clinic?, Transcarent and Teladoc, perfect together?, Get Well partners with Palomar Health, expands with Veterans Health Administration (Speculation can be fun)
Figuring out the future for health tech after 2022’s realignments: new SVB study (Solid weekend reading)
Oracle proceeds with $7B bond sale to restructure debt funding Cerner buy (Easier to manage, but bond rating still falls)
News roundup: cybersecurity benchmarking study, Tyto Care’s Home Smart Clinic, Long Island’s $2.6B life sciences hub, Singapore’s Speedoc raises $28M, NantHealth’s sinking feeling, Hims & Hers revenue up 95% 
TEC Cymru launches telecare programme strategy for Wales to complete digital transition by 2025 (Moving from analog to digital expands telecare)
VillageMD opens the Walgreens purse, set to buy Summit Health for $8.9B (This week’s Big Buy)

A mix of good and not-so-good news. Nearing year’s end, a flurry of fundings and promising partnerships. Walgreens’ VillageMD looking at a huge provider merger. JPM puts its venture money down on healthcare. UK GPs struggle with Data Saves Lives, as do health systems with lawsuits about Meta Pixel. And sadly, digital health layoffs continue at Kry/Livi and Brightline.

News roundup: WakeMed sued on Meta Pixel; Hint Health buys AeroDPC; Neurotrack’s $10M raise, 3 min. cognitive tool intro; layoffs dim Kry, Brightline (Good and bad news)
News roundup UK, AU, NZ: BMA England’s concerns on digital medical records; Australia and NZ’s health connectivity initiatives advance (Data Saves Lives agita)
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 (JPM sees opportunity, one new partnership, and office space to let!)
A spooky ‘good news’ roundup: AtlantiCare rolling out Orbita AI, Health Wildcatters Pitch Day, RapidSOS, HealthJoy fundings and more (Good News. Boo!)
VillageMD considering $5-$10B merger with Summit Health provider group: reports (A BIG provider consolidation, if it happens)

‘Fixing the holes’ this week. Global digital health funding is in a hole even deeper than the US. Telehealth a wobbly panacea, whether for discharged urban patients or care for the disabled. The pothole of layoffs hit Cerebral plus Israeli and German companies. Oracle’s Cerner acquisition requires more funding rearrangement, while VA deployment further delayed. Theranos tries the ‘mental’ defense as it digs out of that hole. But some light for Teladoc in narrowing its quarterly loss, and for smartwatches in accelerating adoption.

Is there a way out of the digital health funding black hole? Can it rebound to…2020? (So much depends on the next few months)
Telehealth-only follow up increased repeat ED visits by 2.8%, return admissions by 1.1%: JAMA Network study (Puts a hole in the savings points)
Smartwatches lead wearables, adoption now at 29%: Parks Associates study (Slow but sure development)
Pre-weekend short takes: Teladoc posts much smaller Q3 loss, 17% revenue boost; is telehealth threatening disability care quality; $2.8M for Australian wearables; more healthtech layoffs at Antidote, OrCam, Ada Health
Oracle talks to banks to increase loans funding Cerner buy; VA delays Cerner deployments to June 2023 (Oracle’s hornet’s nest?)
News updates: Theranos’ Holmes goes ‘mental’ in last ditch defense; troubled Cerebral telemental health fires another 400 (Theranos defense shows desperation, can Cerebral be saved?)

Perhaps it’s because the investment froth is off and it’s downscaling time, but the industry’s current and future status is a bit ‘Back to the Future’. A version that’s muted yet fractious, like the Conservative Party….

Meta Pixel is now considered a PHI breach that’s all Meta’s fault. Both Theranos trials move towards sentencing, despite defenses pulling ever-scrawnier rabbits out of hats. Back to antitrust action with CVS-Signify, while CVS apparently walks away from an expected deal with Cano Health. What’s moving forward? Smaller fundings, partnerships, and reorgs in a world resembling…2017 or 2018?

Meta Pixel ad tracker collects another 3 million data breaches at Advocate Aurora Health; Zuckerberg getting Senate scrutiny (Not going away despite denials and Zuckerbucks)
Breaking: CVS’ Signify Health buy under DOJ scrutiny in ‘second request’ (DOJ and FTC crave an antitrust win)
News roundup: CVS abandons (?) Cano Health buy; Signify adds home RPM; BioIntelliSense RPM acquires AlertWatch; GE Healthcare, AMC Health partner; Viome raises $67M, other fundings
Rosendorff stands pat on Theranos’ Elizabeth Holmes: “She needs to pay her debt to society” (He’s right–and now he needs a job and a relo)

There’s no escaping realignments in health tech. CVS sells an inherited business from Aetna. Babylon Health exits the practice business, financially maneuvers to avoid NYSE delisting. Layoffs continue to hit the formerly hot companies in health tech. Theranos’ Holmes and Balwani try to avoid the inevitable sentencing. And we have a Perspectives contribution from Avaya on NHS England’s ICS. 

Theranos’ Holmes sentencing now 18 November, defense wants to expand hearing scope; Balwani can’t join in
News roundup: CVS sells bswift; Babylon puts Meritage IPA up for sale, financially realigning to prevent delisting; Redesign Health sheds 20%, Noom 10%
Perspectives: How joined-up communications can enable connected patient care across healthcare Trusts

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Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing

Troubled telemental health provider Cerebral may face a lawsuit from former CEO Kyle Robertson. Ousted in May when the company’s prescriptions for ADHD patients started to be excluded from pharmacies such as Truepill, CVS, and Walmart for Schedule 2 (potential for abuse and misuse) medications such as Adderall, Ritalin, and Vyvanse [TTA 6 May], Robertson has written a letter to Cerebral demanding access to documents. The types of documents requested, according to (paywalled) Insider, include “possible breaches of fiduciary duty, mismanagement and other violations of law.” Usually, these are a setup to determine whether others on the company board and leadership were the real culprits in business mismanagement, and a prelude to a legal filing.

CBS News obtained a copy of the Robertson letter, in which “Robertson says he was pressured by the company’s investors to “sell more stimulants” and believes his ouster was an effort to “scapegoat” him as these investigations arose.  He was urged by one board member  that “the easier you make it for people to get stimulants, the better for the business and its customers.” and also claimed that an investor told Robertson’s partner the company’s “ADHD business is crushing and it’s a cash cow … Kyle’s got to push this thing further.” Other documents obtained by CBS allegedly detail clinical safety issues, staff “practicing with expired (or) suspended license(s),” and duplicate accounts which could set the stage for overprescribing. Other documents allege lack of training, pushing prescriptions to 95% of patients, and disregarding state regulations putting licenses at risk. [TTA 29 June] The current management, led by David Mou, has denied this all.

Multiple investigations are proceeding. From May on, Cerebral came under investigation by the Federal Trade Commission (FTC) on deceptive advertising and marketing practices, the Drug Enforcement Agency (DEA) as part of increased scrutiny of telehealth providers and pharmacies possibly overprescribing telehealth-generated prescriptions, and most significantly, the Department of Justice (DOJ) subpoenas on allegations of overprescribing. A prior wrongful dismissal lawsuit by Matthew Truebe, Cerebral’s former VP of product and engineering, alleged that the company put growth before patient safety, including prescribing ADHD drugs to 100% of diagnosed patients as a retention strategy. The concatenation of evidence from multiple sources makes a lawsuit by Robertson, who also cites other factors, probable–unless this is being used as a tablespoon to sweeten his severance.

Prior to that, Cerebral was one of the leaders in the still-hot digital mental health category. In December 2021, their $300 million Series C raise led by Softbank boosted their valuation past $4.8 billion, employed 4,500, and had 210,000 patients. In October, they released 400 staff but other reports indicate far more. Also FierceHealthcare