Mid-week news briefs: House members’ ‘grave concerns’ on two deaths tied to Oracle Cerner VA rollout; care.ai’s $27M funding; Clear Arch’s new mobile RPM platform; digital health investment in rough times

A pre-Thanksgiving news roundup in this short week.

More miseries for Oracle Cerner’s VA rollout. This week, three House members sent a letter to the Department of Veterans Affairs (VA). After a 2 September visit to the Chalmers P. Wylie VA Ambulatory Care Center in Columbus, Ohio and interviewing the staff, they determined that the Cerner Millenium EHR as currently in use possibly led to the deaths of two veteran patients. The deaths were due to 1) hypoxia after an antibiotic ordered for mail delivery was never tracked nor received, leading to a decline in the patient’s condition; and 2) alcohol withdrawal symptoms after a patient’s missed appointment was lost in the EHR and not rescheduled, leading to his decline and death several months later. The three Representatives are asking Denis McDonough, the Department secretary, for answers on the processes and problems that led to this, and more. They are Mike Bost, R-Ill., Mike Carey, R-Ohio, and Troy Balderson, R-Ohio. Becker’s

care.ai, a system that uses sensor-based AI for care facilities, secured $27 million in venture funding from Crescent Cove Advisors. care.ai’s sensors and their Smart Care Facility Platform are currently used in 1,500 facilities in the US to automate, monitor, and streamline clinical and operational workflows in hospitals, skilled nursing facilities, and assisted living facilities. care.ai plans to use the funding from Crescent Cove Advisors to build on their ongoing operations and deliver ambient intelligence to healthcare. Release, Mobihealthnews

Clear Arch Health is introducing a new RPM mobile app, Clear Arch Mobile, as an alternative to its current tablet-based system. It connects via Bluetooth to devices and is based on the LifeStream Clinical Monitoring Dashboard by enhancing security (with two-factor authentication) and simplifying the collection and transmission of patient data for clinician assessment and intervention, as needed. LifeStream was acquired by Clear Arch earlier this year with their buy of Life Care Solutions. Clear Arch is a division of MobileHelp. Both were acquired by Advocate Aurora Enterprises in April. Release (PDF)

How to cope with the transition from easy funding to showing investors that they are squeezing every dime? That was the topic of a roundtable of investors at HLTH last week. One major problem was that the 2020-21 influx of capital boosted valuations to unrealistic and unsustainable levels, leading to unrealistic expectations for growth and moving into businesses that weren’t core. The advice was bracing from investor luminaries such as Glen Tullman of 7Wire Ventures/Transcarent, Emily Melton of Threshold Ventures, Andrew Adams of Oak HC/FT; and Krishna Yeshwant of Google Ventures.

  • Don’t focus on valuation. Focus on how much capital your enterprise needs to the next phase of inflection, minimize dilution, and set yourself up for the next up round.
  • Refocus and reprioritize, making the most of cash resources on hand
  • Have a plan to get to profitability, not just growth
  • Even more depressing news: the downturn is expected to continue through 2023 into 2024 — make cash last into 2025

Growth areas in healthcare they identified will be familiar: mental health, senior care and primary care –one is not, the Medicaid space. Mobihealthnews

Wednesday news roundup: PicnicHealth $60M Series C, can a downturn be good for digital health, Cerebral ran wild, a tart take on HIMSS and where it’s going

PicnicHealth had a bit of one, even in this down market. This company which uses machine learning to build data sets for life sciences by working directly with patients and giving them single-source access to their data raised a $60 million Series C via new investor B Capital Group, with existing investors Felicis Ventures and Amplify Partners. The new funding will be used to build 30 new patient-centered real-world data cohorts. Adam Seabrook, Partner at B Capital Group, will be joining the PicnicHealth board of directors. Their total raise to date is $97 million since 2014 (Crunchbase). The platform was launched in 2020. FierceBiotech, release

Funding news may be a little light nowadays, and if you’re public, you’re looking at double digit share price losses, but couldn’t you guess–the downturn may be good for digital health founders! That’s the view of Big VC General Catalyst’s Hemant Taneja, said at Collision 2022, a Toronto tech conference. Now before you’ve thought the man has totally gone out of his gourd with $5+ gallon gasoline (US), 10% inflation, and rolling blackouts looming on both coasts and the UK, it is true that businesses founded in downturns tend to be tough–my father’s business was founded at the start of the Great Depression. As Mr. Taneja put it, tighter times make for more mission-driven “better founders, better investors and better executives”. Secular trends are in their favor in tech and digital transformation, but there will be another correction coming as the market is over-capitalized. Is it the dot-com boom/bust all over again? Only time will tell, but the crackups are already piling up. FierceHealthcare

Speaking of crackups, Cerebral. A report in the annoyingly paywalled Business Insider tells a tale of Telemental Health Running Wild. Former employees and ~2,000 leaked documents claim that Cerebral had no more than a nodding acquaintance with clinical standards until the Feds stepped in. For starters, they took on patients they should not have, didn’t train their nurse-practitioners and other employees, pushed prescriptions to 95% of patients, disregarded state regulations putting licenses at risk, and generally had more twists than a barrel of pretzels. And this was a company prescribing Schedule 2 drugs that had at peak 210,000 active patients and 4,500 employees.  HISTalk summarizes the article, with our thanks. But it’s par for the course, according to a new JMIR (Journal of Medical Internet Research) study also mentioned that found that “many digital health companies have a low level of clinical robustness and do not make many claims as measured by regulatory filings, clinical trials, and public data shared online.” 

And returning to HISTalk (29 June news), there’s a group of comments from a “HIMSS insider” about how that organization is being managed that long-time observers of this organization will find interesting. Employees thought that HIMSS22 was “awkward”. New and cool conferences HLTH (which initially faltered) and ViVE (which HIMSS didn’t even bother to scout) have taken much of the ‘must attend’ and buzz away from HIMSS. Now this wasn’t supposed to happen with the buy of hipper Health 2.0, to which your Editor was connected–but H2O was HIMSS-ized and effectively killed off even before the pandemic. Regional conferences have disappeared, along with a fair number of employees. HIMSS Analytics is sold. Now this could be all one person’s opinion–but what do you think?

Digital health funding’s Q1 hangover from 2021’s bender–and Q2 is a question mark, even for Rock Health

Chug the Pedialyte and pickle juice, down those milk thistle caps for the liver. It’s a morning after quarter that we knew was coming. After 2021’s mighty year for health tech investment, doubling 2020’s, capped by a $29.1 billion total across 729 deals [TTA 29 Jan], the slump we knew would arrive, did. Rock Health’s tracking of 2022’s Q1 proved to be a less than stellar $6.0 billion across 183 deals. It mildly lagged 2021’s Q1 but was still 75% more than 2020’s depressed Q1 at the start of the pandemic.

Even in January, the 2022 projections were iffy. Silicon Valley Bank projected, based on anemic post-IPO performance, that there would be ‘massive consolidation’ and even acquiring companies to hire talent [TTA 14 Jan]. Rock Health and Silicon Valley Bank noted the waning of SPACs as an easy way to IPO for a variety of reasons, including SEC scrutiny. A combination of both was SOC Telemed. which IPO’d via a SPAC at $10, and was taken private seven months later at $3 per share–after trading at $0.64. SOC was not an outlier–larger telehealth brothers Amwell and Teladoc had taken major share price kicks in the head at 50% and more by February [TTA 8 Feb].

The rest of the story is mixed as the economy continues to open up with the pandemic over, but the stock market is wobbly, inflation soars as does a Russia-Ukraine war. 

  • Average deal size was $32.8 million, again below 2021
  • January was a cheerier month than the following two, with companies raising $3.0 billion. Some of this was carryover from 2021 deals that didn’t quite make it past the post. February slumped to $1.4 billion while March ticked up to $1.6 billion, not a good trend going into Q2.
  • Rock Health’s Digital Health Index (RHDHI), a composite of publicly traded digital health securities, fell 38%, far below the S&P 500’s 5% dip over that same time period.
  • SPACs tumbled along with the market, continuing their fall since 2021. Deals were canceled, taken private (SOC Telemed), and companies sued for misleading investors (Talkspace).
  • Late stage deals continued to roll: mega Series D+ deals in Q1 2022 included TigerConnect ($300M), Lyra ($235M), Alto Pharmacy ($200M), Omada Health ($192M), and Ro ($150M). D and above deal size fell by $16 million. But average deal size fell off at every Series, less so for B and C.
  • Lead clinical investment areas were mental health continuing far in the lead, followed by oncology, cardiovascular, and diabetes. Oncology rose from the fifth spot in 2021 to #2 in Q1, displacing cardio. In value proposition, the top three were on-demand healthcare, R&D, and clinical workflow–this up from the 11th spot.

A weak start for 2022, but only compared to 2021. Q2 and maybe even Q3 will be the test in this mid-term election year. Rock Health Q1 report

Digital Health as Boom Town: 2020’s dizzying funding rounded up by Mercom Capital, StartUp Health

BOOM! Mercom Capital Group published their Q4 and 2020 roundup of global digital health investment and, no surprise, the investment picture for just about anything digital health was in sharp contrast to most of the COVID-afflicted world economy.

The topline:

  • Global VC funding (private equity and corporate venture capital) was $14.8 bn across 637 deals. It was a 66 percent increase in funding compared to 2019’s $8.9 bn in 615 deals. The modest increase in deal number and huge increase in funding points to the acquisition of more established companies requiring Big Deals.
  • Total corporate funding, including VC, debt, and public market financing, totaled $21.6 billion

 

In a stunning change, telemedicine was Top Of The Pops, with $4.3 bn in investment, 139 percent over 2019’s $1.8 bn. It was over double the former star categories of data analytics and mHealth apps.

The top five disclosed M&A transactions in 2020 they tracked were:

  • Teladoc’s acquisition of Livongo Health for $18.5 bn
  • Blackstone’s acquisition of a majority stake in Ancestry.com for $4.7 bn (despite the ‘bloom off the rose’ of consumer genetic testing)
  • Philips’ acquisition of BioTelemetry in cardiac monitoring for $2.8 bn
  • Invitae’s acquisition of ArcherDX for $1.4 bn
  • WellSky’s acquisition of Allscripts’s CarePort Health (CarePort) for $1.35 bn

The Executive Summary is available for free download at the link in the release. The full report will set you back $599 – $999, depending on the version.

StartUp Health has slightly different numbers but in total investment tracks almost to Mercom Capital’s estimate at $21.5 bn. For telemedicine, it still triples year-over-year but StartUp’s totals are lower: 2019’s $1.1 bn to 2020’s $3.1 bn. Part of the difference may be remote monitoring, which StartUp considers separately. It doubled from $417 million to $941 million. Their deal counts were also higher: 764 in 2020 compared to 716 in 2019. Another fun fact in their tracking are their city leaders in health innovation funding: Beijing, Tel Aviv, and London, confirming that New York and the San Francisco metro no longer have money, interest, or their former attraction. A fuller list would have been interesting. More is in their Part 1 study. Part 2, to be released next week, will cover their dozen ‘health moonshots’.

Funding opportunity for digital health projects in the UK outside London

Funding opportunity for digital health projects

Interactive Healthcare Fund is for businesses (SMEs) who wish to bring innovative digital health and wellbeing products and services to market in the NHS and wider health and social care marketplace

Funded by Creative England’s Regional Growth Fund and managed by Creative England in partnership with the Yorkshire & Humber Academic Health Science Network (Yorkshire & Humber AHSN), this Interactive Healthcare Fund is for businesses (SMEs) who wish to bring innovative digital health and wellbeing products and services to market in the NHS and wider health and social care marketplace.

Key Information

  • £250,000 will be available via investments of up to £50,000 per application
  • Companies must be based in England, outside Greater London
  • The fund opened on Monday 4th April 2016 and close on Friday 17th June 2016

Funding will support the development of innovative concepts using digital technology to improve patient care and health services, in response to the following priority areas:

  • Citizen empowerment and maintaining independence for people living with Long Term Conditions (LTCs);
  • Medicines adherence and optimisation;
  • Public health and wellbeing priorities (e.g. obesity, alcohol and smoking cessation) and reducing inequalities in health;
  • Patient safety and falls prevention;
  • Improving mental health and wellbeing (including young people’s mental health).

We will be looking for projects which can demonstrate knowledge of health and social care challenges developed through working with clinical or expert patient groups or both, and the technology skills and the ambition to respond to an identified health and/or social care need.

Here are the FAQs and Application Guidelines, and for applications go here – for further information please contact tim.evans@creativeengland.co.uk (eligibility and technical queries) or p.hedley-takhar@yhahsn.com (healthcare priority areas).

Unicorns to Series A–health tech funding gained in (perhaps) the nick of time

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/08/1107_unicorn_head_mask_inuse.jpg” thumb_width=”150″ /]Money, money everywhere–unicorns get the headlines, but the companies are still (largely) small

Up until early August, this Editor would have assumed that our Readers would look at this funding roundup as a bracing windup to a largely positive eight months and a veritable Corvette Summer for healthcare technology funding. We may have to give back the keys a little sooner than we imagined. Will the dropping market affect digital health as 2008-9 did–‘out of gas’ for years? Or will it barely affect our motoring onward? Despite the Dow Jones average hitting an 18 month low today, we hope it’s closer to the latter than the former. though the new and big entrant to digital health investing is the country most affected, China.

Our roundup of the August Action includes ZocDoc, Fitbit, Alphabet, PillPack, Owlet and more, along with a few comments:

**ZocDoc, a NYC-based online medical care appointment service that matches patients with doctors by location and schedule, had the most sensational round with last week’s Series D funding of $130 million, giving it a valuation of $1.8 bn. It took over a year after the filing (June 2014) and was led by two foreign funds (London-based Atomico and Edinburgh-based Baillie Gifford) with additional funding from Founders Fund, which previously participated in raises of $95 million.

Though it claims 60 percent coverage in the US  and ‘millions of users’ (numbers which have been quoted for some years), ZocDoc won’t disclose profitability nor volume–metrics that would be part of any IPO.

Direction? Points given for deciphering this windy statement (quoted from Mobihealthnews): (more…)

Ka-ching! Mid-year digital health funding hits $2.3 B: Rock Health

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/07/stick_figure_push_up_arrow_400_clr.png” thumb_width=”120″ /]It’s geometric! Rock Health’s total of $2.3 billion in digital health funding as of June 2014 just rocketed through the $1.97 billion 2013 full year total. Year over year to date, it’s up over 16 percent. And there’s stardust on every sub-sector: software, digital health, biotech and even medical device, the laggard (negative growth) in previous reports. Funding rounds must have taken vitamins, because they are 50 percent larger on average at $15 million versus last year’s $10 million. But there’s the same concentration on big deals like NantHealth, Flatiron Health, Alignment Healthcare and Proteus, heavily skewed towards payer administration, digital health devices, data analytics and healthcare consumer engagement. But the clouds on the horizon are there. Last year’s disproportion in seed/Series A accelerates, and the ‘down the line’ weakness continues with proportionally fewer companies reaching B, C and D rounds. Crowdfunding has also lost its luster–50 percent off with Indiegogo dominating–but its blowout with Healbe GoBe [TTA 26 June, CEWeek] accounted for 41 percent of total crowdfunding dollars; MedStartr stayed in the game at a distant second. IPOs haven’t been great, the ‘digital health index’ is an underperform yet funders are still itchy to cash out multi-round companies like Practice Fusion (EHR/billing), Proteus and ZocDoc via IPO. VentureBeat. Rock Health report on Slideshare.

Angels to the rescue in health tech

Funding ‘angels’ in the health tech space are increasingly taking on roles that go beyond investing.  Venture-Med Angels has funded 24 companies in seed and Series A rounds, generally at less than $500,000 along with larger syndications, in areas as diverse as Class 1 and 2 medical devices, including diagnostics, as well as mobile health, health IT, telehealth and remote diagnosis. A key problem is in this admission–so many companies have similar products or services. Common to accelerators, the Angels give their help to startups in pitches, achieving milestones and understanding the importance of their intellectual property. From company name to investment, Venture-Med Angels advise startups (Entrepreneurship.com’s eMed/MedCityNews)