TTA’s Blooming Spring 5: Hinge Health’s IPO, 23andMe bought by Regeneron, sans Lemonaid, WeightWatchers’ future, debuts of Smarter Technologies and Fuze Health, VA EHR update, more!

May 23, 2025 | by

 

23 May 2025

The major news this week was the Hinge Health IPO, the first for digital health in two years–but the downside was that it was at a lower valuation. Denouements abounded with most 23andMe genetic assets bought by Regeneron, without a drink of Lemonaid. WeightWatchers’ time may have passed, new heads for Calibrate and Oak Street, and two more ‘arranged marriages’, Smarter Technologies and Fuze Health. An update on the VA EHRM in the budget. Masimo’s recovering, as is Ted of Strata-gee. 

Remember our soldiers, sailors, airmen, and Marines who have passed on this Memorial Day. Our Monday newsletter will be on Tuesday.

News roundup 22 May: an inflight ‘save’ and AliveCor’s KardiaMobile, rolling out the VA/Oracle EHR in ‘waves’, Fuze Health formed from LetsGetChecked/Truepill, hacking and ransomware 92% of PHI data breaches (A renaming of a 2024 ‘arranged marriage’–can it be saved?)

News roundup: Hinge Health public @$32/share, lower valuation. Is WeightWatchers game over? Calibrate replaces CEO, new prez for Oak Street, NMC gets ‘Smarter’ rolling up 3 portfolio companies, another splash of investor ‘cold water’ (The first health tech IPO in 2 years and ‘smushing’ when they can’t)

Update: Masimo’s website status and an analysis of the Sound United sale (Getting up and running post-attack, but what happened?)

23andMe sold to Regeneron for $256M in court-supervised bankruptcy, sans Lemonaid. And is it worth it? (We come up with a number, it’s likely)

From last week: UnitedHealth Group changed out CEOs suddenly. The new one is a surprising ‘blast from the profitable past’ but that didn’t stop Mr. Market from taking the stock down down down. Another blast involves Elizabeth Holmes’ partner Billy Evans fronting a diagnostic testing- in-a-box startup.”Surprise, surprise!” No surprise that Holmes lost her appeal of an appeal–nor Omada Health filing for an IPO. Unfortunately, our investigator on all things Masimo met his own surprise walking on a sunny day–fortunately, Ted’s on the mend. More about BCIs with Apple integration, a chronic pain management startup, Parkinson’s data, two good raises, and what payers pay to keep their execs safe.

Short takes: Synchron BCI integrates with Apple devices, Shields Health partners with Duke on specialty pharmacy, raises for Cohere Health, Olio (More BCI action with Apple getting into it)

Theranos’ revenge? Holmes’ partner Billy Evans founds a startup for diagnostic testing, denies it is ‘Theranos 2.0’; Holmes loses Federal rehearing appeal. (Is Holmes advising long distance? Letters from a Texas Jail?)

News roundup: Omada Health files for IPO, UPMC-Redesign partner on chronic pain management, OK and PA AGs warn 23andMe users to delete data, Verily to build Parkinson’s dataset, what payers paid for exec security (Omada follows Hinge. But the last is surprising–between a lot and a little)

This just in: UnitedHealth Group CEO Andrew Witty steps down immediately, replaced by former CEO Stephen Hemsley (updated 15 May) (UHG may change out CEOs, but continues to be hammered by Mr. Market)

Best wishes to Strata-gee’s Ted Green on a fast recovery! (Ted, our ace Masimo investigator, was put rather suddenly in a bad place…use your eyes when you drive!)

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News roundup: Hinge Health public @$32/share, lower valuation. Is WeightWatchers game over? Calibrate replaces CEO, new prez for Oak Street, NMC gets ‘Smarter’ rolling up 3 portfolio companies, another splash of investor ‘cold water’

May 22, 2025 | by

Hinge Health now public. Today (22 May) Hinge Health debuts as HNGE on the NYSE, the first big IPO for healthcare tech in two years. Last night, the virtual MSK/physical therapy provider raised $437.3 million in its IPO. Shares were priced at the high end of the offering range at $32. The timing is a small surprise, as in early April insiders said to press that they had not committed to any dates due to the market’s roller coaster, but they stayed on their original schedule [TTA 8 Apr].

The nitty-gritty:

  • The floating is 13,666,000 shares of Class A common stock, 8,522,528 of which are being sold by Hinge Health and 5,143,472 of which are being sold by certain selling stockholders.
  • The underwriters have a 30-day option to purchase up to an additional 2,049,900 shares of Class A common stock at $32, less underwriting discounts and commissions.
  • The valuation comes in at the $2.6 to $3 billion range. This is a shave-and-a-haircut from the bubbly days of November 2021, when its Series E raise of $600 million gave it a valuation of $6.2 billion–and this was on top of a January 2021 Series D of $300 million [TTA 5 Nov 2021]. 
  • Hinge also has a Class B voting share class that ensures that major investors including Insight Partners (19% prior to the IPO) and Atomico (15%), along with co-founder and CEO Daniel Perez (18.9%), retain control of the company

The IPO was delayed repeatedly in an uncertain market for health tech raises, much less IPOs. Starting in 2024, rumors flew, early filings were made from last April then in October last year [TTA 3 Oct 2024]. Total raises for Hinge as a private company were $826 million from multiple investors, who were undoubtedly clamoring for OPM (other people’s money) and a full or partial exit. Hinge also let some positive results sink in; they reported a 50% increase in Q1 revenue to $123.8 million from $82.7 million in Q1 2024. Net income went positive at $17.1 million, reversing a net loss of $26.5 million in last year’s Q1.  Endpoints (requires registration), Hinge Health release, CNBC  Will competitor Omada Health be far behind?

The rest of the news is a bit more sobering, reflective of the real challenges health tech/digital health faces, in multiple businesses.

WeightWatchers’ bankruptcy and fast reemergence may be only a brief waypoint in its troubles. This Editor opined at the time of the 45-day prepackaged Chapter 11 that WW was simply kicking the can down the road. Their subscription model of low calorie diets, points, and exercise no longer worked when well-funded teleprescribers such as Hims & Hers, LifeMD, FuturHealth, and Ro, along with traditional telehealth providers like Teladoc, had long since jumped on the GLP-1 promise of quick and assured weight loss. WW didn’t enter GLP-1 prescribing until October 2024, well after it took off even in high prices and scarcity, but continued to lose subscribers. The coup de grace? The partnering deals that teleprescribers as well as CVS Health’s Caremark PBM worked with Novo Nordisk to stimulate their volume for Ozempic and Wegovy. Thus the Chapter 11 and the dumping of $1.15 billion in debt may buy time, but not solve, their market disconnect.

An article from earlier this week in MedCityNews takes the same tack in an interview with industry analyst Michael Schnell, a director in health consultant West Monroe’s healthcare M&A group. Mr. Schnell regards WW as a legacy company in representing the old ‘diet culture’, with the new teleprescribers representing “private, digital-first, affirming wellness experiences that are in themselves a rejection of ‘diet culture.’” It’s a positioning (real estate in the mind/Denny Hatch) dilemma that in its clarity somehow evaded this marketer. It’s echoed by another industry analyst and Virta Health’s CEO Sami Inkinen, a company that has focused on diabetes control and weight loss via nutrition but pivoted last year to add GLP-1s.

WW’s fundamental dilemma is encased in its fundamental 60 year old promise–that you can lose weight, but it requires commitment and work. Their traditional weight loss model of diet and exercise, once fairly simple, grew complicated and not cheap. Complicated and costly will be beaten every time by those who promise a lot less effort, even with cost and side effects that are significant. Now it costs even less. Cigna’s Evernorth announced yesterday that its PBM Express Scripts now will cap monthly out-of-pocket costs of Novo Nordisk’s Wegovy and Lilly’s Zepbound at $200/month, saving an estimated $3,600 annually versus typical DTC discount programs. FierceHealthcare Can WW buy enough time to solve their market problem? Based on prior marketing experience, it’s not likely even if WW completely reinvents itself.

Even among the weight loss teleprescribers, all is not keen and peachy. Calibrate changed out its second CEO in just over a year. Rob Rebak, most recently CEO for three months of Mosaic Diagnostics and earlier CEO of Forefront Telecare (sold to Access TeleCare), replaces Rob MacNaughton, who joined in February 2024 from venture chair of Redesign Health. Other executives have also departed: CFO Bert Smith and chief clinical officer Jane Ruppert. According to CEO Rebak, MacNaughton will remain on Calibrate’s board as an advisor to him. Joining is a new COO, Paul Merrick, another former Forefront Telecare exec. The breaking report is in Endpoints (may be paywalled) and oddly, not elsewhere including the Calibrate website which does not have an executive list, nor press releases on Business Wire.

Originally a portfolio company of Redesign Health, Calibrate has had its ups and downs. The company sold a 70% interest in a 2023 ‘reorganization’ to private equity firm Madryn Asset Management along with other investors  with founding CEO Isabelle Kenyon departing. An early entrant in the GLP-1 obesity management game, promoting ‘metabolic reset’, it also received the brunt of drug scarcity and social media backlash, refunding millions to subscribers.[TTA 26 Oct 2023]

A sidebar on GLP-1s. A systemic review and meta-analysis of 497 articles by a team at Sacred Heart University (CT), retaining eight randomized controlled trials comprised of 2372 participants, all with a BMI ≥ 27 kg/m2, indicates that after discontinuing GLP-1 therapy, weight regain was proportional to the original weight loss. The regain varied by type of GLP-1 drug, but the study labels it ‘significant’. Obesity Reviews (Wiley) 4 April 2025   GLP-1 weight loss is not one course and done–actually good news for the teleprescribers and pharmas as in ‘they’ll be back’. 

Oak Street Health replaces its president. The CVS practice unit named Creagh Milford, DO, MPH as Oak Street’s new president. He comes from CVS’ Minute Clinic as head of retail health from January 2024. Dr. Milford replaces Brian Clem, a 10 year Oak Street veteran who according to the Crain’s Chicago Business article and his own LinkedIn posting, “had decided to move on” after being president since May 2019, prior to CVS. Previously, Mike Pykosz, CEO and co-founder of Oak Street Health, had moved up in the months after the May 2023 buy of Oak Street into CVS corporate, eventually heading up their Health Care Delivery unit. He departed fairly suddenly in November 2024 [TTA 27 Nov 2024]

New Mountain Capital (NMC) does the smush again with three portfolio companies. The new entity, Smarter Technologies, combines SmarterDx (AI for chart analysis catching missed billing codes and appeal denied claims), Thoughtful.ai (agentic AI for checking insurance eligibility and prior authorization), and Access Healthcare (RCM). The revenue cycle management (RCM) company for health systems and hospitals will be headed by Jeremy Delinsky, an executive advisor to NMC and founding COO of Devoted Health. It now totals according to their release 200 clients, including more than 60 hospitals and health systems with over 500,000 providers. It processes more than 400 million transactions and manages over $200 billion in combined revenue annually. No other management transitions are mentioned but on the website, the co-founders/CEOs of the three companies are listed alongside Mr. Delinsky. It’s the second big rollup in less than one year for NMC, which last September combined Apixio’s payment integrity business and Vario into The Rawlings Group to create one giant $3 billion payment integrity company. Last January, NMC acquired Machinify Inc. to roll into Rawlings.

NMC is a big investor with $55 billion in management assets that evidently buys with an eye to combining companies–and also isn’t afraid to back quickly out of deals that don’t work. Just ask Anne Wojcicki of 23andMe.

Gimlet EyeWe close with a Gimlety view from three health investors. MedCityNews’ recent INVEST conference hosted three investors who opined on three important topics: Raffi Boyajian, Principal, Cigna Ventures; Aman Shah, Vice President of New Ventures, VNS Health; Dipa Mehta, Managing Partner, Valeo Ventures. Your Editor’s comments follow.

  • Does every startup need to be AI-powered? Everyone may be pitching AI in their models, but it may not really mean anything. What really means something is building a good business first, then adding in AI to make it better, according to Aman Shah of VNS Health. When is AI just a buzz word and really machine learning? Much of the time. Do these companies really understand it? Or is it a money and time-burning diversion?
  • There aren’t a lot of new things to build anymore. It used to be that companies found a problem and invented a new way to solve it (ah, remember the cocktail parties of yore?), but that is not the way it works now. Where the most success is now is “creating companies with customers versus trying to create something on their own,” according to Dipa Mehta of Valeo. This is a partnership model that can go sideways if a young company is not careful. Customers may not want to pay and you remain in ‘pilot hell’.
  • Value-based care isn’t everything. For early-stage companies, “you can get upside down on your contracts very, very quickly in terms of a financial perspective,” according to Raffi Boyajian of Cigna Ventures. VBC is complicated for providers and for management service companies (MSOs)–imagine being an outsider. 

TTA’s Blooming Spring 2: Teladoc buys UpLift to buck up BetterHealth, Novo Nordisk partners with Hims, other teleprescibers on Wegovy, Masimo’s former CEO claiming un-granted shares, Commure-HealthTap partner, more!

May 2, 2025 | by

2 May 2025

Cherry blossoms are starting to fall, much like Teladoc’s revenue for Q1 in our lead story. Can their acquisition of a small virtual mental health provider with insurance coverage help turn around BetterHelp? And what about their main business? Novo Nordisk would rather partner than fight with teleprescribers Hims & Hers, Ro, and LifeMD for GLP-1 Wegovy–will this be a trend? Commure adds to its ‘house that Jack built’ tech stack with a HealthTap partnership. And Masimo’s latest episode of its ongoing soap opera is that its former CEO (and major shareholder) is claiming ownership of shares as part of his severance–but they haven’t been granted and very much in dispute. (Irony alert: they’ve increased in value since his departure!)

This just in: Teladoc acquires UpLift for $30M, bolstering struggling BetterHelp telemental health; Q1 revenue down 3% (Can this telemental health be saved with one acquisition?)

News roundup: Hims, Ro, LifeMD and Novo Nordisk partner on Wegovy prescribing (updated); Commure partners with HealthTap for virtual care after hours; WebMD Ignite adds texting to member health ed; hellocare.ai raises $47M for virtual nursing  (When you can’t beat ’em in weight loss meds, join ’em. With a side of Commure’s interesting M.O. on acquisitions.)

Masimo updates: former CEO Kiani claims 13.2% ownership, and a review of the new management’s style (updated) (The soap opera continues)

From last week: Cherry blossoms are blooming (finally) and so is the news. The roundups include Walgreens’ continuing Aisle 9 cleanup of their Federal opioid prescribing allegations, a huge and mysterious breach of Google Analytics sending Blue Shield CA member info to Google Ads, and Veradigm’s interim CEO will be taking the summer off. Our big reads include two surveys: the first on the state of healthcare AI (more show than go) and the second on RPM utilization–and effectiveness. Two raises, a BCI/telehealth merge, and international initiatives.

Product & funding very short takes: South Australia 1st with Sunrise EMR; S. Korea pain research, new emergency services app; BCI + telehealth for stroke patients; VirtuSense monitoring launches at Emory; Series B raises for Nourish, Healthee

Short takes: Veradigm’s interim CEO departing, Blue Shield CA breached 4.8M members’ PHI to Google, advice on expanded M&A premarket notification rules (You can’t blame that CEO for ankling after all the trouble he’s seen! And Blue Shield has 2nd largest breach–involving Google Analytics. Bad timing for Google.)

News roundup: Walgreens’ $350M opioid settlement, only 30% of healthcare AI pilots reach production, Medicare RPM usage up 10-fold despite benefit limitations (Walgreens cleans up again, and two surveys on AI and RPM for weekend perusal)

Holding this over: The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business (Grab the cuppa and lunch for a good read and podcast. Updated–Also Tecco’s blog post on why she quit being an angel investor.) 

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Contact Editor Donna for more information.

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News roundup: Hims, Ro, LifeMD and Novo Nordisk partner on Wegovy prescribing (updated); Commure partners with HealthTap for virtual care after hours; WebMD Ignite adds texting to member health ed; hellocare.ai raises $47M for virtual nursing

May 1, 2025 | by

Partnerships and add-ons are much in the news this week.

Hims & Hers isn’t worrying about GLP-1 drug sourcing. Neither are Ro and LifeMD. All three made a deal with Novo Nordisk on providing branded Wegovy to cash-paying members with a prescription. Wegovy is supplied through NovoCare Pharmacy through each of the telehealth suppliers.

Hims & Hers received immediate benefit–their stock jumped 23% on Tuesday above $33. Wegovy is already available to Hims & Hers members, but  those without a membership, they will bundle a membership with Wegovy and supply services including 24/7 care, nutrition guidance, and clinical support, starting at $599/month. Longer term, the two companies plan to match up Novo Nordisk’s technologies with Hims & Hers’ ability to scale access to care. Novo Nordisk’s programs with competitive telehealth prescribers Ro and LifeMD start at $499/month, but may be more based on services provided.

Updated: The smaller LifeMD, a below $10 Nasdaq stock, also jumped 40% to above $8 and settled in around $7 this morning (Friday 1 May). (Ro–Roman Health–is a private company.) FierceHealthcare LifeMD also recently acquired assets of women’s telehealth provider Optimal Human Health MD as their entrée into the women’s health market. The new service will be focused on menopause and osteoporosis, monitoring hormone health, bone density, metabolism and long-term wellness. Debut is this summer. No financials were disclosed.  Release, FierceHealthcare

This was just in time to meet the FDA deadline on GLP-1s. All three teleprescribing companies were using less expensive compounding pharmacies to supply generic versions of semaglutide up until recently. In February, the FDA reclassified the drug as no longer scarce, which ended that authorization to sell the compounded drugs as of now [TTA 25 Feb, 27 Feb]. Hims, as the largest, stood to lose the most and fought very hard to keep the compounded versions of these drugs including an aggressive ad blitz blasting the pharmas. Evidently, they’ve now reconsidered–as has Novo Nordisk in lowering prices and selling through the teleprescribers. If you can’t beat them, join them. However, based on what this Editor hears on the radio, companies like FuturHealth are selling compounded versions alongside branded GLP-1 medications. Mobihealthnews, CNBC

Software integration meets virtual healthcare for after-hours coverage. Healthcare software integrator Commure is partnering with HealthTap‘s online primary care network and telehealth services to provide what they term a ‘unified solution that bridges the gap between in-person and virtual care’. Commure’s slightly bewildering tech stack centers on EHR integrations for workflow, scribing, RPM, RCM, and AI-powered agents–along with a workplace security system, Strongline. The partnership now offers to providers turnkey implementation for services such as after-hours coverage and virtual primary care, with the big plus of not adding staff. Mobihealthnews, Release 

Commure’s interesting developments in the past year or so included a fire-sale priced buy of Memora Health for $30 million in December 2024, adding its conversational AI-powered agent to its ‘stack’, undoubtedly to the relief of in-common investors General Catalyst and Andreessen Horowitz (a16z). In October, Commure bought ambient AI medical documentation company Augmedix (one of the few SPACs that didn’t crack) in a $139 million deal [TTA 8 Jan].    Axios‘ further analysis of the Memora Health buy is worth a read.

WebMD Ignite’s Coach health education and engagement platform adds text messaging. The Coach platform, used by care managers for health plan members, has added an integrated SMS text messaging app. This provides for plan care managers:

  • Real-time reach: Push notifications ensure messages are seen promptly, keeping health education and motivation top of mind.
  • Custom branding: Text templates can be customized to reflect each health plan’s brand and messaging.
  • Member convenience: Deliver concise, actionable information directly to members’ mobile devices.
  • Seamless workflow integration: Care managers can select, send and track text-based education within Coach, including opt-in and opt-out management.

The text messaging can also be used for population-wide campaigns to engage members at scale for health initiatives. Text’s advantages over email delivery is immediacy and also more narrow targeting, as many have multiple emails but only one (or two) mobile phone numbers. Release, FierceHealthcare  (Disclaimer: this Editor previously worked as a marketing consultant to what was then Krames, now part of the services under WebMD Ignite)

Our one significant raise of the week is (again) in virtual nursing. hellocare.ai‘s $47 million raise was led by HealthQuest Capital led the round with participation from several health systems and digital health investors, including UCHealth, Bon Secours Mercy Health, LRVHealth and OSF Ventures. hellocare.ai provides an in-room AI-assisted virtual nursing platform for “smart hospital” rooms plus telehealth and hybrid care services for hospitals, home care, and primary care. The platform includes virtual sitting in up to 32 rooms 24/7 on a single remote clinician’s monitor, virtual consultation, ambient documentation, digital whiteboards, patient engagement, and hospital-at-home integrated into the hospital’s EHR. hellocare.ai claims installations in 70+ health systems that include the investors. Since 2012, the Clearwater, Florida company has raised over $88 million. Release, Mobihealthnews

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

January 8, 2025 | by

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

Wojcicki: I’m transforming 23andMe to be ‘viable’ and thriving–but had ‘no idea why her board resigned’

December 4, 2024 | by

Transform it till it survives. That seems to be the meme of 23andMe’s CEO/founder Anne Wojcicki in a “CBS Mornings” ‘exclusive’ with co-host Gayle King. Dropping on 27 November (Wednesday morning before Thanksgiving), the 10-minute segment was primarily a pre-recorded eight-minute interview done in a ‘living room’ setting earlier with an introduction and closing commentary with two others. For a non-business interviewer, King directed it better than expected, though the context was soft, with an intro and early questioning that focused on the company’s problems and a Fortune article (more below), then moving towards the end to Wojcicki’s family and personal challenges this year. 

Wojcicki believes that the company is ‘viable’ and ‘transforming’ under her. King redirected Wojcicki from her initial corporate boilerplate-speak twice within the first few minutes back to the troubles of the company, including “How does a company survive when it’s lost 98% of its value though?” The answer was rather pat: “We absolutely are in a situation where we’re figuring out cash burn and we’re looking at all the ways that we’re gonna drive revenue growth.” which is about as much as a CEO and controlling shareholder would want to say about a public company potentially facing shareholder lawsuits.

King touched on the instances of last year’s massive data breach [TTA 19 Jan, 2 Feb], the layoff in November of 40% of its remaining workforce [TTA 14 Nov], and the entire resignation of the board [TTA 17 Sept]. This last elicited the surprising revelation that Wojcicki had “no idea why her board resigned” nor “great insights into what the strategic differences were” or that “there was not an overt disagreement.” King did not drill down into that brace of amazing statements about a hand-picked board of a public company during a financial crisis, trying to decide on a course of action whether to sell or go private. She also did not address the role that the data breach and 23andMe’s widely derided treatment of their customers had in precipitating the company’s decline.

Regarding content in the generally negative Fortune article from October, Wojcicki rebutted the former employees’ view that all decisions ran through her and that she was “outwardly charming, but stubborn and controlling behind the scenes.” saying that ‘”I love getting feedback” and that she encouraged everyone to voice their opinions and share suggestions, which is not quite the same as a collaborative management style or delegation. To her, her vision was centered on using genetic data for consumer empowerment, research, and discovery. Unfortunately, the company moved away from the consumer part which remained largely one-off testing, despite the late adoption of a subscription model and refocusing on consumer products such as GLP-1 drugs. The corporate focus became drug discovery and development (closed) and the GSK data (ended).

To Wojcicki, the closures and layoffs are justified in what she envisions as the ultimate transformation of the company, her new mantra. King closed by asking her about her one and five-year predictions for the company. At one year, Wojcicki without blinking and with a small smile said that 23andMe would be “thriving”. Five years? With a large, confident, and convincing smile, with clasped hands, Wojcicki said it would be “transforming healthcare”. This Editor has heard that song before.

News roundup: Cano Health board fight, board shakeup; Memora Health’s $30M raise; Teladoc enters weight management race

April 21, 2023 | by

The continuing drama at Florida-based primary care provider Cano Health focuses on the board and CEO. The three board members who resigned in late March [TTA 7 April]–Barry Sternlicht, Elliot Cooperstone, and Lewis Gold (who we’ll dub the Cano 3)–are now demanding that the company board reopen the window for director nominations at the 2023 Annual Meeting of Stockholders. In a letter/press release targeted to fellow shareholders released on Monday, the group cited “drastically changed circumstances”, exclusion of the three from decision-making prior to their resignation, and “the emergence and disclosure of additional self-dealing and concerning related-party transactions that were not previously disclosed – have cast serious doubt on the credibility and fitness of the current Board and CEO Marlow Hernandez.” The letter/release also focuses on the company’s negative (-83%!) performance over the past year. The three own 36% of the common stock of Cano Health, which means they have a very loud voice.

Cano management responded on Monday with a very long letter/press release of its own rebutting the “destructive actions” of the Cano 3  with a lengthy but somewhat anodyne six-point action plan to move the company toward profitability, improve performance, and increase liquidity. Point 6 was quite the kicker: appointing a non-executive chairman of the board, Solomon (Sol) Trujillo. This separated the chairman and CEO roles, with the highly controversial founder Dr. Marlow Hernandez remaining as CEO. Not addressed were the issues around Dr. Hernandez. He has been accused of self-dealing in two instances: $23 million to the CEO’s father for general contracting work, and $8.5 million to a dental care company owned by Mrs. Hernandez. Earlier coverage included dubious transactions with Miami medical claims recovery company MSP Recovery (also known as LifeWallet).

What’s interesting about this is that it may turn into a battle royal between two major figures: chairman Sol Trujillo against Barry Sternlicht. Mr. Trujillo is highly experienced in board/CEO roles in high-stress turnaround situations, such as at Orange SA and most recently Australia’s Telstra Communications. Mr. Sternlicht is well known as the CEO of Starwood Hotels and is a major real estate and private investor.

Cano Health was founded in 2009 and went public via a SPAC in 2021. It lost $426 million in 2022. The shareholder meeting date hasn’t been released yet, but in 2022 it was in May. Stay tuned. Healthcare Dive, MarketWatch

Memora Health raises $30 million. This venture round was led by General Catalyst and joined by several health systems including Northwell plus existing investors Andreessen Horowitz, Transformation Capital, and Frist Cressey Ventures. Memora has AI-based technology for complex care management and digitizes clinical and administrative workflows. FierceHealthcare, Crunchbase

Teladoc to premier weight management program using GLP-1 agonist drugs. This will be part of their physician-based care product for employers, and will target patients needing additional assistance in weight loss and diabetes prevention. The program provides access to a Teladoc-employed doctor for a personalized care plan, along with daily coaching with digital tools. Debut is projected during Q3. GLP-1 drugs such as the widely advertised (in US) Ozempic injectable were originally designed for diabetes management but have found a different market in weight loss. Companies such as Calibrate, Ro, and Sequence (acquired recently by Weight Watchers) are competitors. Healthcare Dive