Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities

September 19, 2023 | by

Catching up on the catchup…

Israel-based Intuition Robotics raised $25 million. The unlettered round closed at end of August with $20 million in venture capital plus $5 million in venture debt. According to the release, the funding was led by Woven Capital, the growth fund of Toyota, with participation from Toyota Ventures, OurCrowd, Western Technology Investment, and additional investors. Intuition Robotics is the developer of ElliQ, an interactive desktop companion robot targeted to older adults and those with assistive needs, last covered in their 2.0 update last December and their involvement with New York’s Office for the Aging [TTA 25 May 22 and WSHU]. The Area Agency on Aging of Broward County, the Olympic Area Agency on Aging, and California’s Agency on Aging in Area 4 have also worked with Intuition Robotics on distributing the companion to older adults in their programs. According to the company, older adults who successfully engage with it average over 30 daily interactions with ElliQ and reduce the devastation of loneliness for 95% of users. 

Akili Interactive exits prescription digital therapeutics (PDT), pivots to consumer, drops 40% of staff. Much like Better Therapeutics and the now sliced-up Pear Therapeutics, the company realized that PDT was not a winning strategy for its interactive video game-based therapy for adults with ADHD. The EndeavorOTC version, released in June, is available via a subscription (SaaS) through the Apple App Store and the Google Play Store for $24.99 for a monthly plan or $129.00 for an annual plan. According to their release, Akili will pursue regulatory approval for over-the-counter labeling of its treatment products. Akili is yet another cracked SPAC facing a reckoning, currently trading on Nasdaq at $0.66 from its debut in August 2022 at $14 with a quick fall to $4.   HIStalk 15 Sept, Rock Health Weekly Newsletter

NextGen acquired by private equity firm Thoma Bravo for $1.8 billion, ending 41 years of public market trading. The offer price is $23.95 per share in cash, an over 46% premium to the Nasdaq share price on 22 August. NextGen Healthcare is an EHR with population health and practice management features designed primarily for specialty medical practices. NextGen went public as Quality Systems an eon ago in 1982.  Release, FierceHealthcare

And…the American Telemedicine Association (ATA) celebrates the third annual Telehealth Awareness Week (17-23 September) with a telehealth advocacy ‘fly in’ to meet with Congressional offices and Members in Washington DC on 18-19 September, plus their three tools to eliminate disparities in telehealth services developed by ATA’s Advisory Group on Using Telehealth to Eliminate Disparities and Inequities. They are a Digital Infrastructure Disparities Score and Map, an Economic and Social Value-Added Calculator, and a toolkit with all ATA and advisory group-developed resources. Releases 19 July (fly-in) and 18 Sept (disparities tools)

Mid-week corral: CVS closes Signify Health; Bertolini to lead Oscar Health; ViVE highlights from Wellvana, AWS, Everly Health; Better Therapeutics lays off 35%, CoverMyMeds 815

March 30, 2023 | by

CVS closed its acquisition of Signify Health today. This $8 billion transaction ($30.50/share) adds a network of more than 10,000 clinicians nationally, including the 170-provider Medicare ACO group originally organized by Caravan Health. It was beneficial to the major shareholder group, New Mountain Capital and their investors, which owned 60% of Signify and have a tidily profitable exit. The CVS press release stated that Signify would continue to operate as a ‘payer-agnostic’ business within CVS Health. As earlier stated, Kyle Armbrester, Signify’s CEO, will continue to lead the business. Also Healthcare Dive (updated)

The bulldog engineer of the CVS-Aetna merger, Mark Bertolini, now tapped to head Oscar Health. Bertolini, the former chairman/CEO of Aetna (center), in the past three years since his unwilling (according to him) departure from the CVS board of directors [TTA 6 Feb 2020], has not been idle. From 2022, he was co-CEO of asset management firm Bridgewater Associates, and in the last 18 months, he has been a ‘strategic advisor’ to insurtech Oscar. Now he moves to the CEO office effective next Monday (3 April) and joins their board. Co-founder Mario Schlosser (left) steps back from CEO to president of technology, reporting to Bertolini, and joins the board. Joshua Kushner, a co-founder and major investor (Thrive Capital), as well as executive chairman of the board, is on the right in the leadership picture supplied with the Business Wire release.

Once a skeptic of insurtechs like Oscar, Bertolini by his statements is now a true believer. In a call with investors on Tuesday, he cited their technology that included digitization, individualization, and personal care. A major factor is that consumers are more comfortable since the pandemic with telehealth. Oscar was a pioneer in offering free telehealth with their plans.

Investors have pressed Oscar to get over to a profitable state by next year. Oscar has not been profitable since its 2012 founding by Schlosser, Kushner, and the long-departed Kevin Nazemi. In the time since Bertolini joined as an advisor, they have largely shed their Medicare Advantage business and concentrated on their individual market and ACA plans, which have seen huge growth along with overall record enrollment on the exchanges. But Oscar paused on new ACA signups in Florida and hauled back its glitchy and over-featured +Oscar tech platform [TTA 24 April 2021], which is now available unbundled. 2022 financials were substantially in the red with a loss of $610 million on revenue of $4 billion (Oscar release). However, the news of Bertolini moving to Oscar’s helm was met with a round of investor confidence. Share price moved from Monday’s close of $3.41 to $6.70 midday Tuesday and has largely stayed in the $6.00 range. Oscar release on Business Wire, FierceHealthcare, Healthcare Dive, YahooFinance

ViVE, the digital health spinoff of HLTH, concluded its annual meeting in Nashville this year with an announced attendance of 7,500, including 650 startups, 425 investors, and 330 hosted buyers. The energetic start on Sunday was sadly marked on Monday with the shooting at the local Covenant School where six were killed. Impressions from an anonymous attendee to HISTalk today were that most of the sessions were panels (which gets more people up front, but can be sunk by a dull moderator) versus individual speakers (who can either be fabulous or duds). Content could have been more inspiring and, as usual, many speakers are throwing out headlines for those in media to write about. This Editor has read relatively little so far but more will come this week. Highlights so far:

  • Nashville-based Wellvana Health, which provides technology for healthcare providers and health systems to implement value-based care, raised a stunning Series B of $84 million for a total raise of $140 million. Heritage Group and Valtruis co-led the investment with participation from Memorial Hermann Health System. The funding will be used to expand from its present 22 states and over 100,000 lives. Their current agreements are with multiple payers, Medicare Advantage, and three national contracts for the 2023 ACO REACH model. FierceHealthcare, Mobihealthnews
  • Everly Health is moving beyond its current home testing kits to integrate lab testing with telehealth. This will cover certain conditions, such as COVID-19, flu, sexually transmitted infections (STIs), urinary tract infections (UTIs), thyroid, weight management, and men’s and women’s health. Cost is out of pocket $59 and if insurance covers, $10-50. In its weight management program, Everly will offer GLP-1 drugs, a class of drugs that includes Ozempic and Wegovy, to qualified patients. FierceHealthcare
  • Amazon Web Services (AWS) announced 23 startups for their 2023 Healthcare Accelerator: Global Cohort for Workforce. This year’s accelerator cohort is finding solutions for the healthcare industry in three core areas for healthcare employees: retention, deployment, and training. More on the accelerator here and the list here, including 10 from the UK. FierceHealthcare
  • Health systems are demanding a quick ROI on their digital expenditures, according to a panel of CIOs and digital officers from Providence, Allegheny Health Network, Sutter Health, and Adventist Health. It should not be a surprise to anyone that they are looking for returns in the next year or so–yet are pushing forward with investments because of inflation and increased workforce pressures. FierceHealthcare

Another digital cognitive behavioral therapy trims. Better Therapeutics is reportedly releasing 35% of staff, or 15 people, in yet another cutback of another company in the formerly high, wide, and flying sector. Better specializes in prescription digital therapeutics to address cardiometabolic diseases such as diabetes. Better SPAC’d in 2021 [TTA 8 April 2021] hitting the market at $10.25 and currently trading on Nasdaq at about $0.60. According to their SEC filing, they are trying to stretch remaining cash to reach potential FDA marketing authorization and subsequent commercial launch of BT-001 in Type 2 diabetes. Better is in the same jam as competitors Pear Therapeutics and Akili Interactive, both paring back to the bone and looking for buyers, according to Mobihealthnews. Also LayoffsTracker. 

CoverMyMeds, a division of healthcare giant McKesson, is also laying off 815 by mid-April and closing its Scottsdale, Arizona office. The Arizona office has the company’s patient support center; workers there will be given the option to move to Columbus, Ohio. Other offices including Columbus (Franklinton) and Atlanta will be condensed and space leased out. CoverMyMeds automates the prior authorization process for medications for payers. What is unusual is that the company, bought for about $1 billion in 2017, accounted for $1.1 billion of McKesson’s $70.5 billion in 2022 revenue, and $136 million in McKesson profit–the most profitable of their four divisions. Columbus Dispatch, Layoffs.fyi

Week-end roundup: more House actions on telehealth benefits, VA EHR; Oracle exec moves to FDA digital health; Angle Health raises $58M; layoffs at Akili, Innovaccer, Athenahealth, Mindstrong

February 4, 2023 | by

Has the House in this 118th Congress acquired a propensity for taking fast action? It seems that under the new Speaker, the House on both sides, though divided, is energized and responding to changes that would benefit worker health–and perhaps find a way out of the VA Tower of Trouble that would ultimately benefit veteran care.

The first is a short (four page) bipartisan bill still in draft, the Telehealth Benefit Expansion for Workers Act, that would amend current law in the Public Health Service Act, the Employee Retirement Income and Security Act of 1974, and the Internal Revenue Code of 1986 to allow employers to provide telehealth to employees as excepted benefits. This allows employers to finance an additional benefit not covered under their primary health plan. Examples of excepted benefits are vision and dental plans. Sponsors of the bill are Rep. Suzan DelBene (D-WA) as lead and co-sponsors  Tim Walberg (D-MI), Angie Craig (D-MN), Ron Estes (R-KS), Mikie Sherrill (D-NJ), and Rick Allen (R-GA). This builds upon the Medicare and other plan reimbursement expansions contained in the omnibus budget plan passed in the 117th Congress that extended telehealth in high-deductible health plans with health savings accounts (HSAs). At this point, the bill is not numbered, submitted, or on Congress.gov. HealthcareITNews

Not addressed in this bill or any other is whether the extensions will cover hospital-at-home remote patient monitoring (RPM) that was permitted under waivers during the Public Health Emergency (PHE). With its scheduled 11 May end, the Connected Health Initiative (CHI) believes that CMS will not allow remote monitoring to continue in hospital-at-home programs, under current reimbursement and devices. CHI had sent Congress at the end of January a list of their priorities and they’ve received a hearing, but no action has been taken yet. Healthcare Finance

The second is a House bill that would support solving the issues around the VA implementation of the Oracle Cerner EHR without returning to VistA. This is being proposed by Democrats on the House Veterans’ Affairs Committee. According to FedScoop, which broke the story, this is being worked on as an alternative to Rep. Matt Rosendale’s H.R. 608 which would pull the plug on Oracle Cerner and revert back to VistA [TTA 1 Feb]. Exactly how this bill would solve Oracle Health’s issues with Cerner Millenium and support VA in continuing that EHR implementation after June is not specified. FedScoop’s source told them that “the proposal may have a wider scope than prior attempts at legislative oversight and could involve a complete rethink of how other IT projects are conducted within the agency. This proposal is focused at a higher level than just one program.” The lack of specificity in this broad brush is not precisely reassuring, but a bipartisan ‘game on’ by both parties on Veterans Affairs, perhaps a ‘good cop/bad cop’ treatment, could be an effective ‘nowhere to hide’ approach with Oracle. Becker’s

Oracle’s loss, FDA’s gain. Troy Tazbaz, formerly Oracle’s senior VP heading up their cloud transformation efforts, joined FDA as Director of their Center of Digital Health Excellence. In that capacity, he will be in charge of technology evaluation, policy development and strategic partnerships for safe healthcare use of digital technologies that advance public health. Certainly he is tanned, rested, and ready: Mr. Tazbaz  left Oracle last September and used part of that time to achieve a dream of bicycling from Chesapeake Bay in Maryland to San Francisco Bay over 58 days. FierceHealthcare

Employer insurer Angle Health raised a $58 million Series A. Lead was Portage Ventures, along with PruVen Capital, Wing Venture Capital, SixThirty Ventures, Mighty Capital, and several others. Angle’s angle is to act as a fully digital, full-stack insurance carrier that delivers comprehensive healthcare benefits tailored to startups and technology companies on one platform. Their baseline telehealth offering covers primary care, urgent care and behavioral health, outsourced to Included Health. They bundle this with administrative services and care navigation, and use the First Health and Cigna PPO networks according to their website. Angle recently expanded from Utah into Arizona, Georgia, Indiana, Ohio, Missouri, and South Carolina. Release, FierceHealthcare

Unfortunately, layoffs continue in and out of healthcare as funding and usage go south:

  • Akili Interactive in January cut 30% of staff, or 46 people. Akili has developed cognitive therapies for ADHD and other mental illness, including EndeavorRx, a prescription treatment delivered through a video game. Non-ADHD therapies have been put on hold. They announced going public via a SPAC in January 2022 via a merger with Social Capital Suvretta Holdings Corp. I which closed last August at over $14, and are currently trading at $1.92. Mobihealthnews
  • Innovaccer, a health data analytics company, later in January laid off 15%, or 245 people, in the US and India, to concentrate on their ‘core portfolio’. This is their second layoff round;  90 people or 8% went in September. This was quite a turnaround to their sunny-side up 2021, where they raised Series D and E rounds totaling $255 million backed by Tiger Global, Whale Rock, Mubadala Group, and Microsoft M12, achieving a unicorn valuation over $3 billion.  Mobihealthnews, Inc42.com
  • Athenahealth yesterday released 178, or 3% of its staff, two months after going private. They pointed to overhiring, a sluggish recovery in doctor visits, and inflation. They plan to release or move to less expensive office space in their current cities of Watertown, MA and Austin, TX. Boston Globe
  • In yet another sign that virtual mental health’s boom is deflating sharply, Silicon Valley-based Mindstrong is essentially shutting down. Almost all of its C-suite including the CEO and CFO are gone plus an additional 128 jobs including therapists. It is closing its headquarters and is ceasing patient services as of 10 March, yet is still recruiting on its website. Employees are departing between 24 March and 15 April, when presumably the last one out the door will turn out the lights.  Mindstrong raised over $160 million since 2014 including a $100 million Series C in 2020. Behavioral Health Business

News, deals, rumors roundup: Cerner’s DOD and VA go-lives, Akili’s ADHD therapy SPACs, Talkiatry’s $37M raise, Alto sings a $200M supper–and the Cigna-Centene rumors don’t stop

January 28, 2022 | by

While Cerner’s acquisition by Oracle is winding its way through regulatory approvals, their EHR implementations are moving forward through both the Military Health System (Department of Defense) and the Department of Veterans Affairs (VA).

  • Within the MHS, Brooke Army Medical Center and Wilford Hall Ambulatory Surgical Center, both in the San Antonio (Texas) Market, went live with MHS GENESIS on 22 January. The change most visible to patients is the transition from TRICARE Online to the MHS GENESIS Patient Portal which enables 24/7 access for visit notes, secure messaging, test results, appointment scheduling, and online prescription renewal. MHS covers military retirees, active military, and family beneficiaries. According to the MHS’s website, the goal this year is to get to halfway–to implement MHS GENESIS in more than half of all military hospitals and clinics. It’s been taking place since 2017 and, in true military fashion, it’s planned in waves. Coming up are Naval Medical Center Camp Lejeune in South Carolina on 19 March and William Beaumont Army Medical Center in El Paso in summer.
  • VA is moving far more slowly, just getting to its second hospital. The Columbus VA go-live has been pushed back from 5 March to 30 April, citing training slowdowns due to a spike in staff COVID cases. Walla Walla, Washington is set for after Columbus, but the date is to be confirmed. The first, failed implementation at Spokane’s Mann-Grandstaff VA Medical Center in late 2020 was the subject of Federal hearings and a complete redo in VA’s plans and procedures in cutting over from VistA to Cerner Millenium. TTA 28 July and previous. Federal News Network

Akili Interactive, which has developed tech-driven, game-based cognitive therapies for ADHD and other psychiatric and neurological conditions, has gone public through a SPAC via a merger with Social Capital Suvretta Holdings Corp. I, The transaction is expected to close in mid-2022. Akili will be listed on the Nasdaq stock market under the new ticker symbol AKLI.

The SPAC is expected to provide up to $412 million in gross cash proceeds and value the company at over $1 billion. Investors in the $162 million PIPE are Suvretta Capital Management’s Averill strategy, Apeiron Investment Group, Temasek, co-founder PureTech Health, Polaris Partners, Evidity Health Capital, JAZZ Venture Partners, and Omidyar Technology Ventures. The funds raised will support the commercial debut of EndeavorRx, a FDA-cleared and CE-marked prescription digital therapeutic for pediatric ADHD. The technology is termed the Selective Stimulus Management Engine (SSME) and will be rolled out for ADHD, ASD, MS, and MDD treatment.

TTA noted Akili last year in a trial of AKL-T01 at several hospitals for treatment of long-COVID-related cognition problems. Unfortunately, the writing in their SPAC release made this Editor feel like she needed a few treatments.

Mentalhealthtech (psychtech?) continues to attract funding. Psychiatric care startup Talkiatry topped off its July $20 million raise with an additional $17 million from Left Lane Capital for a $37 million Series A financing round. CityMD founder Dr. Richard Park, Sikwoo Capital Partners, and Relevance Ventures also participated. Talkiatry uses an online assessment for a preliminary diagnosis and then matches you with a participating psychiatrist.  It is in-network with payers such as Cigna, Aetna, UnitedHealthcare (Oxford Health Plan), Oscar, and Humana. Funding will be used to expand beyond NYC. Mobihealthnews

Digital pharmacy is also hot. Alto, which promises same-day filling and courier delivery, raised a $200 million Series E led by Softbank Vision Fund. Their total to date is over $550 million. Alto serves selected areas mainly in California, Nevada, Texas, and NYC (Manhattan, Queens, Brooklyn). Competitors Capsule had another raise of $300 million in April for a total of $570 million and Medly raised a $100 million Series B in 2020. Mobihealthnews

In the wake turbulence of Centene’s dramatic management shakeup last month [TTA 18 Dec], rumors continue to surface that insurer Cigna is interested in acquiring all, or possibly part, of Centene. Bloomberg News in publishing its article earlier this week cited ‘people familiar with the matter’ said that talks took place last year, but that they are not ongoing. Seeking Alpha picked this up, adding market activity boosting Centene. Perhaps the disclosure and the ‘denials’ align with what this Editor has heard–that it’s very much ongoing but under wraps.

A Centene buy makes sense, but only with Cigna. While Cigna is almost double the market value of Centene, it does not have the sprawling business model the latter has, nor do their businesses overlap much. However, some divestiture would be needed to do a deal, given the constrained regulatory environment in the US on the Federal and state levels. Any insurer merger is seen as anti-competitive, unless it is an acquisition of a smaller, struggling plan. 

It certainly would vault Cigna into the top rank of insurers with non-Centene branded exchange, Medicare Advantage and Medicaid plans, a provider network, an established MSO, and other lines of business including Magellan behavioral health management. Cigna might also value Centene’s international holdings, such as private hospitals Circle Health in the UK and Ribera in Spain. A sale would also create a quick and profitable ROI for Politan Capital Management, the activist investor company that initiated the retirement of 25 year CEO Michael Neidorff last month, rather than managing and reorganizing the sprawl of Centene’s businesses to make it more profitable.

Deal and news roundup: Therapy Brands’ big KKR investment, AppliedVR’s non-painful $29M Series A; Akili tests cognitive-boosting games; Firefly Health lights up $40M; Mastercard-b.well partner, two big IPOs filed, more

April 8, 2021 | by

Behavioral health stays on the bubble. Therapy Brands, a Birmingham, Alabama-based company with a suite of mental and behavioral health practice tools for providers, announced (7 April) that major investment firm KKR will take a majority interest in the company. Existing investor PSG will participate. Exiting are current investors Lightyear Capital LLC, Oak HC/FT, and Greater Sum Ventures. Neither expected closing nor financial terms were disclosed. Previous investment was private equity and is not available (Crunchbase).

Therapy, founded in 2013, has a suite of practice management, telehealth, and data collection tools encompassing practice management; software tools for substance, psychotherapy, and rehab treatment; two HIPAA-compliant telehealth/e-prescription platforms; billing; and staff performance evaluation. It’s remained under the radar yet boasts leadership from Greenway Health–their CEO, Kimberly O’Loughlin–Community Brands, Advance Publications, ADP, and Henry Schein. 

Virtual reality and its effects on the brain are growing warm as an approach to pain management. LA-based AppliedVR announced a $29 million Series A with F-Prime Capital, JAZZ Venture Partners, Sway Ventures, GSR Ventures, Magnetic Ventures, and Cedars-Sinai. Their EaseVRx was the first VR-based prescription therapeutic to receive FDA Breakthrough Device Designation late last year to care for treatment-resistant fibromyalgia and lower back pain. VR is used to modulate the brain’s perception of pain through cognitive behavioral therapy, mindfulness, and biofeedback, reducing it in intensity and emotional effect. Total funding is $35 million since 2016. While still in clinical trials for other types of pain management (recent release), EaseVRx is being used by 200 provider groups and 60,000 patients. This Editor noted their inclusion in a Louisville Thrive Center showcase back in 2017 when Care Innovations was there; they are still listed under Social Engagement. Release. FierceHealthcare includes AppliedVR with a roundup of March deals.

Related in brain management is therapy for a long-term effect of COVID-19 infection recovery–cognitive impairment. An emerging long-term effect of COVID-19 illness in some individuals has been ‘brain fog’. Akili Interactive of Boston is collaborating with Weill Cornell Medicine, NewYork-Presbyterian Hospital, and Vanderbilt University Medical Center to evaluate their video game-based digital therapeutic AKL-T01 as a treatment for patients with cognitive dysfunction following COVID-19. Their EndeavorRX has also been used with therapy for children with ADHD and includes a behavior tracking app. Release

Boston-based startup Firefly Health scored a luminescent Series B of $40 million. Their current platform provides integrated in-person and virtual primary health along with specialist referrals and behavioral support in what they term a ‘digital Kaiser’. The raise will be used to launch a targeted health plan offering. Firefly already works with Aetna, Anthem, Tufts Health Plan, and UnitedHealthcare, among others, but at this time is pretty much limited to Massachusetts and does not accept Medicare nor Medicaid. Jonathan Bush, former CEO of athenahealth, joined back in 2019 as executive chairman a year after his departure. FierceHealthcare

And in other news…

Two IPO filings plus a SPAC:

  • Privia Health, a national physician platform furnishing management services to providers such as group formation (ACOs) and technologies for coordination and value-based patient care, announced their S-1 with the SEC. No share offering information was disclosed. Lead managers are Goldman Sachs and JP Morgan, so it will be sizeable.
  • Agilon Health, another management services company organizing community physicians for Medicare Advantage in their ‘Total Care Model’ value-based care for 65+, announced their S-1 for 46.6 million shares priced between $20 to $23 per share. At the low price, this would be a raise of $932 million. JP Morgan, Goldman Sachs, and BofA Securities are leads. Hat tip on both to HISTalk Morning Headlines.
  • Better Therapeutics, a digital therapeutics/cognitive health platform addressing type 2 diabetes and cardiovascular disease, will be merging with a SPAC, Mountain Crest Acquisition Corp. II, closing by late summer for listing on NASDAQ. Projected: $113 million of cash proceeds, including a fully committed $50 million PIPE and up to $57.5 million of cash held in the Mountain Crest II trust account assuming no redemptions, for a valuation of about $187 million. Release, Mobihealthnews

Mastercard and b.well Connected Health, a consumer health management platform via employers, health systems, and health plans, are launching a patient identity verification tool for mobile phones. FierceHealthcare

And a health tech entrepreneur turns towards the payer side, for now. Karl Hess joins Texas Health Aetna, a joint venture between Arlington-based Texas Health Resources and Aetna, as interim CEO. Mr. Hess is better known to health techies on LinkedIn as principal of OnDigitalHealth Consulting, Kalico Partners in population health management, Welltok, and Collain Healthcare. Becker’s Payer Issues