A Gimlet Eye view on IPOs and Cracked SPACs: Altaris buys Sharecare for $518M, takes it private; a look at Waystar and Tempus AI post-IPO

June 26, 2024 | by

Gimlet EyeSharecare finally gets itself bought and taken private, less than three years after its SPAC. One-time health tech darling Sharecare, now a patient navigation and employee benefits platform and once valued at $3.9 billion, will be acquired by healthcare-focused private equity company Altaris LLC for $1.43 in cash per share, or about $518 million. The shares on the buy date, 20 June, were trading at $0.77 so the offer is about an 86% premium, though shares are now trading at around $1,38. (Notably, Sharecare was below the $1.00 threshold for Nasdaq since February.) The transaction is expected to close in Q2 subject to formal shareholder approval and regulatory agencies. In terms of management, the executive team is expected to continue at least for now, with founder Jeff Arnold voting his shares in favor of the transaction and continuing as a shareholder. Release, FierceHealthcare, Mobihealthnews

Founded in 2010 by WebMD founder Jeff Arnold and celebrity doc/former political candidate Dr. Mehmet Oz, Sharecare had IPO’d a decade later via a SPAC, Falcon Capital Acquisition Corporation. It announced in February 2021’s Pandemic Palmy Days then hit markets on 2 July. At that time as essentially a personal care management app, it debuted at above $9.00 and received $571 million in gross proceeds with a reported valuation of $3.9 billion. A month later, it acquired CareLinx, an on-demand home care provider, from Europ Assistance in a $65 million cash/shares deal. By late 2021, Sharecare entered the Cracked SPAC Track as shares cratered. Dr. Oz is no longer on the board of directors or the advisory board. As share values fell precipitously, in November 2023 Mr. Arnold turned over the CEO reins to Brent Layton, a 20+ year Centene veteran and its retired president, picking him from the BOD and moving to chairman.

Shortly thereafter, Fruit Street sued Sharecare, a former partner, for $25 million charging that their diabetes prevention program (DPP) was supplanted by Sharecare’s own, breaching their contract and appropriating intellectual property. [TTA 14 Dec 2023] This suit is apparently still wending its way through the infamous Fulton County, Georgia courts. Sharecare also faced an escalating number of shareholder class action lawsuits alleging false and misleading statements on their financial condition (KRON 4).

What can we learn from IPOs as they are reviving? The first, of course, is that SPACs have gone the way of the dodo and passenger pigeon. The second is that there are quality IPOs, and then there are the ones to watch out for even if you are not an investor.

Remember first and foremost that VC and PE investors want to exit, profitably. And quickly. Exit=Sell to Someone Else. “Someone else” can be an IPO or another investor. An IPO means offloading the risk to the investing public. Please do keep in mind that what follows 1) is not investment advice, only observations and 2) your Editor is only a marketer, but one who has seen investments go up, down, and sideways since her days at the Frank Lorenzo School of Airline (Mis)Management, a/k/a New York Air (right, below) including a year observing up front and personally the dismal fate of Eastern Airlines. (Somewhere she has her old Texas Air share certificates…)

The investment scene in health tech and AI strongly resembles the Wild West days of airlines post-deregulation 30 years ago. Investor money in, now fleeing for the exits, whether the bankruptcy court or passing the hot potato to others with money.

Waystar IPO’d earlier this month at $21.50 per share. Checking in today, it’s trading at $21.55, essentially in a narrow and flat trading range in a down market. The IPO gave Waystar a fully diluted valuation of $3.69 billion. It’s early days, but three factors in favor of WAY staying the course at least short term are:

  1. They waited to IPO for the better part of a year and pulled it back when their initial valuation of $8 billion made Mr. Market ROTFL.
  2. Their investors have held on tight: EQT AB, Canada Pension Plan Investment Board (CPPIB), and Bain Capital will beneficially own approximately 29.2%, 22.3%, and 16.8%, which is over 68% of the company.
  3. They occupy a boring part of healthcare and aren’t new kids on the block. Payments and revenue cycle management (RCM) aren’t sexy or trendy. Waystar is the combination of ZirMed (1999) and Navicure (2001) which merged and renamed in 2018. 

The downsides: Competition. Lots of it. The usual unprofitability. Waystar lost money the past two years. Last quarter, those losses accelerated (Google Finance). Will that show up later this year in share price?

Tempus AI also IPO’d mid-month at an eyewatering $37/share, at the top of its offering range, and a valuation in excess of $6 billion. It’s AI! It’s backed by Google! And it rose 15% on its first day of trading, 14 June! Precision Medicine! Intelligent Diagnostics!

But where are shares today on 26 June? It closed yesterday at $24.96. That’s a downer of 32% from the IPO price–38% if you take it against the first-day close above $40. I’m sure the first-day investors, unless they have cast-iron stomachs, have already reached for the antacids.

So what’s going on here? Tempus AI’s business combines AI for data analytics and a vast database to guide doctors in therapy and treatment, identify clinical trials, guide treatments, and close gaps in care. The analysis is done on blood samples, buccal swabs, and liquid tests. It’s a familiar pitch that multiple companies are using around AI and their ‘vast databases’ from the time of IBM Watson’s lofty ambitions.

  • Their CEO has already traversed the hype circuit. “We’re on a really good trajectory,” Tempus AI CEO Eric Lefkofsky, the founder of Groupon, said on CNBC’s “Squawk Box” Friday morning before shares started trading. “As revenues have been growing quickly, we’re not investing all that gross profit dollar growth back into the business. We’re generating improved leverage every quarter.” (Exactly what does that mean? Probably that money is sent down to the profit line.) Setting expectations–within the next year, the company is expected to be cash flow and EBITDA positive within the next year. It’s twice been on CNBC’s Disruptor 50 list of private companies which historically has been a mixed bag.
  • In their favor is that they already have as of today 510(k) clearance from FDA for its Tempus ECG-AF device to identify patients who may be at increased risk of atrial fibrillation/flutter (AF). It’s the first FDA clearance for an AF indication in the category known as “cardiovascular machine learning-based notification software”. But it needs to be integrated into resting 12-lead ECG recordings collected at a healthcare facility and analyzed against other patient data. What is that timeline and market?
  • Tempus has already survived and evolved from one major pivot. Looking back, they started in the genomic testing business in 2015, primarily concentrating on oncology. In 2020, it branched out to then-trendy Covid-19.  CNBC 17 June 2020  Genomics is now subsumed on the site by terms such as pharmacogenomics (PGx) coupled with patient-reported outcome (PRO) software.

Investors up to the IPO were listed as Google, Baillie Gifford, Franklin Templeton, NEA, Softbank, and T. Rowe Price. Who’s sticking around? The underwriters are Morgan Stanley, JP Morgan, Bank of America Securities, and Allen & Company. Reuters  Customers include AstraZeneca and GSK (GSK.L). One of its competitors, Guardant Health, which has patents in DNA blood testing for cancer, is suing on infringement on five patents. Reuters

All in all, Tempus AI started off way high–and there is only one way to go from there. They have a great story and a potentially good business, but it bears watching, not investing, at this point.

2023 was buying time, 2024 is face the music time: Rock Health

February 8, 2024 | by

Rock Health’s year-end wrapup, which usually makes a splash, didn’t this year. It was released this year in conjunction with the JP Morgan Healthcare Conference in the week after New Year’s, which almost guaranteed it would fly below the radar.

Another analogy: if you were doing aerobatics, 2023 for digital health was maintaining a flat spin from altitude if you could (left/above), 2024 would be getting out of the flat spin and into level flight before you and the ground had a meeting, so to speak.

Rock Health’s summary of 2023 was minus their typical frothiness:

  • It was back to 2019 across the board, as if 2020-21 never happened.
    • Full year 2023 raised $10.7 billion across 492 US deals. It was the lowest amount of capital invested since 2019, which finished with $8.1 billion across 413 deals. By comparison, 2022’s total was $15.3 billion across 577 deals.
    • Q4 2023 was the lowest funding quarter since Q3 2019, with an anemic raise of $1.9 billion across 122 deals.
  • M&A was left for dead, unexpectedly so from their earlier projections. (Note to Rock Health–it could be the negative attitude toward deals emanating from Washington)
  • A and B stage companies had trouble raising money in the usual lettered way. 81% of currently active venture-backed startups that raised a round in 2021 didn’t raise a labeled one in 2023. Some resorted to ‘extensions’ that further diluted existing ownership or unlabeled rounds that left more questions about when the next raise was going to be. Unlabeled rounds hit an all-time record of 44% of total raises, double that of 2022. (This Editor notes that there were no analyses of C and D rounds, because there were so few.)
  • “Silent rounds” of financing happened but were hard to gauge–and because they were inside, didn’t measure the attractiveness or competitiveness of the company in the real market. It was pure, simple survival of the company and the investment.
  • Startup shutdowns, in their view, were no higher than usual–less than 5% of venture-backed US digital health companies (i.e., have raised >$2M).

In this Editor’s view, the percentage does not capture the prominence of the startup shutdowns: Babylon Health, Quil Health, Pear Therapeutics, OliveAI, Smile Direct, Cureatr, SimpleHealth, The Pill Club, Hurdle. It also doesn’t count Amazon shutting down Halo, Cano Health’s parting out before this week’s bankruptcy, as well as Bright Health’s (now NeueHealth) divestitures and shutdowns through 2023 leading to their becoming a very different company in 2024. 

For 2024, Rock Health is seeing:

  • The return of labeled raises (A, B, C etc.) In their view, many companies will not be able to manage this without moving into ‘hot’ areas like obesity care (cue the Ozempic), value-based care enablement, or AI. Those that can’t will either have ‘down’ rounds or close (see this week’s closing of Astarte Medical in the NICU segment because they wouldn’t integrate AI).
  • M&A will increase, with acquirers buying low among the now cash-strapped companies. This Editor would add that both DOJ and FTC will have their say about this, having published new Merger Guidelines in December.
  • Publicly traded companies will ‘recalibrate’, which is a polite way of saying a lot of companies will face delisting. As of 31 December 31, 2023, at least 17% of public digital health companies trading on the NASDAQ or NYSE were noncompliant with listing standards. This Editor notes that 23andMe is the latest cracked SPAC in jeopardy. Some will rally, the strongest may IPO. BrightSpring Health IPO’d on 26 January, Waystar’s is pending. 

Their sobering conclusion. Too many companies were created in the last few years of the boom. “2024 will be a year of recalibration and consolidation. Some startups will rally, finding that high capital efficiency and exceptional offerings pay off to secure them their next major fundraise. Others will need to make the tough call to wind down operations or accept lower-than-hoped-for M&A offers, particularly in saturated segments.”

At last, Rock Health and TTA have met on similar ground. This Editor’s take back in December. From ‘Signs of the next phase in 2024’:

“…the board is being cleared of the also-rans and never-should-have-beens. They are like dead plants and brush that need to be cleaned out so that new growth can happen. We are cycling through some of them already as we move to a New Reality and winding this up.”

Additional TTA views on 2024: The New Reality permeating JPM, and Peering through the cloudy crystal ball into 2024

Peering through the cloudy crystal ball into 2024 healthcare investment and company health

January 25, 2024 | by

crystal-ballWill 2024 be the mirror image of 2023? This time last year, signs pointed to slow, steady growth after the bubble bath of 2020-early 2022 was followed by failures of tech-leveraged banks (SVB and Signature in March 2023) leading to a mid-year bust [TTA 11 Aug 23]. Some big deals kicked off the year (CVS’ Carbon Health investment, Oak Street mega-buy TTA 16 Feb 23). Then as the year went on, they were followed by sheer turmoil–huge losses and business divestitures (Cano Health, Bright Health, insurtechs like Clover and Oscar), bankruptcies and shutdowns (Babylon, Pear, Quil, OliveAI, Smile Direct, Cureatr, Rite Aid), IP lawsuits (Apple-Masimo, Apple-AliveCor, FruitStreet-Sharecare), C-levels walking the plank (Walgreens, Noom), and big layoffs nearly every week. Cigna and Humana called off merging again, perhaps because Cigna didn’t like what it saw. M&A fell to its lowest level in years and IPOs fell to zero.

To cap the year, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) issued new Merger Guidelines that made the M&A mountain even steeper, and will follow up this year with Pre-Merger Notification guidelines that will make that part even more costly. Both signal hard times for M&A. Add to that the overt hostility the chair of the FTC has to any kind of M&A and the weaponization of the tools government has at hand…..Even early-stage, independent companies which allegedly these agencies are trying to foster don’t catch a break. A change in the tax law hitting hardest in 2023 forces annual expenses in research and experimentation (R&E) to be amortized over five years versus one year which severely affects their financials. (Section 174 explained here)

The crystal ball promises to be more like a Magic 8 Ball this year. Other than a flurry of smaller-scale investments, a rumor of a $5 billion EHR company sale (Netsmart), and predictable layoffs in health systems, the start of the year in healthcare has been fairly (ominously?) quiet.

HealthcareFinance talked to two partners in law firm Akerman’s healthcare practice group to get their take, weaving in some findings from a PWC report: 

  • Buyer interest in acquiring practices and surgery centers
  • Partnerships on rise, for example Amazon’s One Medical with health systems 
  • Smaller hospitals in mid-America will merge as there is “safety in numbers’
  • More investment in life sciences and drug development, especially diabetes/weight loss drugs in the GLP-1 category
  • Anything around AI attracts interest

The two big factors: interest rates (the Federal Reserve has signaled no further increases, and maybe cuts in 2024) and (of course) a presidential election as well as all of the House, much of the Senate, and state gubernatorial offices.

Bubbling under this are reports of two big pending IPOs:

  • Home health, pharmacy, and eldercare services provider BrightSpring Health filed with the SEC on 3 January for a near-billion dollar IPO (publicly released on 17th). This is estimated to raise $960 million, valuing the company at about $3 billion. Common stock will debut between $15 and $18 on Nasdaq under the symbol BTSG. They are also selling 8 million tangible equity units at $50. Proceeds will go from the offerings to repay outstanding debt under various credit facilities and pay penalties associated with terminating its monitoring agreement with Kohlberg Kravis Roberts & Co. L.P. (KKR, the current owner) and Walgreens Boots Alliance. BrightSpring serves 400,000 daily patients and dispensed 34 million prescriptions in 2022. IPO timing is still to be announced. This is the second time the company has filed, abandoning its first attempt in late 2021 as the market softened in 2022. KKR is signalling an exit…will it happen this time? Release, FierceHealthcare
  • Waystar’s IPO is still pending after being announced late last year [TTA 26 Oct 23]. The RCM and payments software company delayed it to 2024 due to an uncertain market at year’s end. Reportedly the roadshows were postponed to December but there has been no confirmation that they took place. Will it happen?

Fasten your seatbelts…it may be a bumpy ride.

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

April 6, 2022 | by

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

News and deal roundup, 5 March: Oscar Health’s $1.4 billion IPO, telehealth expansion in Congress, what people *really* do during a telehealth visit

March 5, 2021 | by

What a difference a month makes in a blazing healthcare market. ‘Neoinsurer’ Oscar Health went public on Tuesday, selling over 37 million shares at $39 each, reaping an eyeblinking $1.44 bn. While shares took a tumble on Wednesday and Thursday, closing at just above $32, the valuation of the company could be anywhere between $7.92 and $9.5 bn (calculating in options and the like). Quite a difference from the estimate in early February, which was a modest–and as now we know, totally sandbagged–$100 million [TTA 9 Feb]. A lovely payday for their backers and all at Oscar who had stock grants, indeed.

As we’ve seen from recent IPOs, they have all been underestimated (e.g. Signify Health’s $100 million filing transubstantiated into $561 million). The downward glide slope in share price is typical. Whether it will rise will depend very much on strong results for this quarter, half year, and full year as Oscar presses harder into the competitive Medicare Advantage, exchange, and small group markets. How they, and all the other payers do, will be dependent on health policy permutations and emanations from the DC Swamp. CNBC, TechCrunch, FierceHealthcare

Speaking of the DC Swamp, telehealth expansion is enjoying real traction in Congress and with Health and Human Services (HHS). The chair of the House Health Subcommittee, Rep. Anna Eshoo (D-Calif.) has called for many of the flexibilities on payments and locations granted temporarily during the pandemic’s liberalization of coverage to be made permanent. These affect Medicare and other types of Federal payments. [Review of the 2021 Medicare Physician Fee Schedule re telehealth here]  They expire after the public health emergency (PHE), extended in January to end of April, so a clock is ticking, quickly.

The basics are that Congress must pass legislation that removes restrictions on geography (currently rural only) and permits the patient home to be used as a ‘distant site’. Advocates also want to add to Medicare telehealth coverage hospice and home dialysis care, more types of eligible care providers such as physical therapists and other allied health professionals, and audio-only (telephonic) consults. Others are pushing for reinstating HIPAA compliance for telehealth platforms.

The Telehealth Modernization Bill that covers most of the above was introduced on 23 February in both the Senate and House, in a rare show of both bipartisanship and bicamerality. (Excluded: telephonic consults, HIPAA compliance) Rep. Eshoo’s remarks were made during last Tuesday’s Committee on Energy and Commerce Health Subcommittee hearing.

HHS is also backing this, based on HHS’ Office of the Inspector General’s recent statement praising the expansion of telehealth. Recognizing that concerns have been raised about ‘telefraud’, IG Christi Grimm noted that they have been vigorously prosecuting fraudulent claims [TTA 2 Oct 20] with telehealth being used in a broad sense for billing other goods and services such as medications and durable medical equipment. FierceHealthcare, Healthcare Dive, ATA News 26 Feb

Speaking of telehealth visits, what do the patients do during them? This Editor had filed away, waiting for an opportune moment to share it, a surprising study by DrFirst, a mobile telehealth and communications platform. It was conducted online during the Pits of the Pandemic (June 2020). It may not surprise you that most patients weren’t fully engaged in the process. Bored, isolated, mostly male patients–73 percent men, 39 percent women–multitasked and distracted themselves during the virtual visit by: 

Surfing web, checking email, texting – 24.5%
Watching the news, TV, or movie – 24%
Scrolling through social media – 21%
Eating a snack or a meal – 21%
Playing a video game – 19%
Exercising – 18%
Smoking a cigarette – 11%
Driving a car – 10% (!!!!)

And the best….Having a “quarantini” cocktail or other alcoholic beverage – 9.4%

Reasons for consults were unsurprising: annual checkup – 38%, mental health therapy – 25%, and specialist visits (e.g., dermatologist, hematologist, or oncologist) – 21%.  N=1,002 US consumers. 44% of Americans Have Used Telehealth Services During Coronavirus Pandemic but Some Admit Not Paying Attention. Also Advisory Board blog.

‘Neoinsurer’ Oscar Health goes for $100 million IPO; Clover Health’s big SPAC under SEC microscope

February 9, 2021 | by

Oscar Health, one of a number of US ‘insurtech’ or ‘neoinsurance’ private health insurance companies that have nipped at the heels of the Big 9, announced late Friday an IPO on the NYSE. The number of shares and their value is not on the SEC S-1 filing but the estimate of the raise is $100 million. Timing is not disclosed but rumored to be by March or early Q2. The offering is underwritten by Goldman Sachs, Morgan Stanley, and Allen and Company.

Oscar was one of the first to offer members apps, telehealth, and fitness trackers–revolutionary back in 2012 but routine now. Expanding beyond its original base of individual health insurance coverage, it now offers Medicare Advantage and small group coverage in 18 states to over 500,000 members. Oscar remains a virtual-first platform with the majority of its members in Florida, Texas, and California. Oscar makes much of member engagement and its partnerships; 47 percent of its overall subscribing membership and 44 percent of its 55-and-up subscribers are monthly active users. Oscar has also partnered with Cleveland Clinic and other larger insurers like Cigna. 

Financing for Oscar to date is over $1.5 bn. It has tidily grown in geographic coverage, members, and revenue–$1.67 billion in 2020 and $1.04 billion in 2019–no simple feat against the Big 9. Oscar’s problem is profitability–operating losses grew proportionately, $402.3 million (+56% from $259.4 million). Operating expenses also grew by 16 percent. TechCrunch gives additional crunch in the financial analysis (article in part, full paid access). Mobihealthnews

Oscar is one of a few health-tech heavy survivors of insurance companies that bloomed like flowers–and wilted–during and post-Obamacare. Clover Health, which thrived in a slice of the Medicare Advantage market, went the SPAC (blank check) route 8 January with Social Capital Hedosophia Holdings. Now with an enterprise value of approximately $3.7 billion, the SPAC indeed put Clover in the clover [TTA 14 Jan].

But perhaps short-lived. Clover’s SPAC is now being scrutinized by the SEC based on last week’s explosive charges by short-seller maven Hindenburg Research (!). Hindenburg’s research report alleges that Clover “lured retail investors into a broken business” by not disclosing a Department of Justice (DOJ) investigation that started (at least) last fall. Clover countered that the investigation is “routine” since Clover is in the Medicare business. Thus, it was not disclosed by Clover to investors as ‘non-material’. DOJ investigations are far more serious than CMS fines for compliance violations, which are not uncommon. Back in 2016, Clover was fined just over $106,000 by CMS on misleading marketing practices.

In short, DOJ investigations are never routine. They usually are the start point for enhanced claims scrutiny and a concatenation of charges, as WellCare, then a scrappy upstart insurer, found out over six agonizing years, 2006-2012, that were serious enough to send much of top management to Club Fed.  The Hindenburg paper (linked above) details other business practices that if true, are dodgy at best and fuel for further investigations.

The SEC notice of investigation was disclosed by Clover last Friday evening, usually a good time to disclose Bad News. This SPAC may have feet of clay.  PYMNTS.com, CNBC

News roundup: Phreesia’s IPO, Chiptech enters UK telecare market, PatientsLikeMe goes to UHG, Medopad-Tencent UK Parkinson’s pilot, Oxford VR goes to HK, Cigna Singapore’s telehealth intro, HIMSS exiting Cleveland

June 27, 2019 | by

Patient check-in tablet Phreesia is preparing for an IPO, filing of its S-1 form this week. The number of shares and pricing is not yet announced. Phreesia, which specializes in patient intake in the office via a rugged PhreesiaPad tablet and software that integrates with major EHRs such as Epic, Cerner, and Allscripts, has survived not only 14 years, but also in New York City. Phreesia has enjoyed a relatively low profile on the health tech scene, yet it has raised close to $100 million through a Series D (Crunchbase) and maintained much the same founding leadership (Chaim Indig, Evan Roberts, Michael Weintraub). Their business includes 1,600 health firms and 70 million patient intakes annually, for $100 million in revenue in its last fiscal year, up 25 percent from previous. Timing of the IPO is not yet forecast. Mobihealthnews, Business Insider.

Coming to the UK and Europe markets are New Zealand’s Chiptech telecare systems. Chiptech has both traditional in-home and mobile monitored PERS, pill dispensers, and a smartphone-based lone worker alert device. According to their website, they are the leading provider of monitored personal alarms in Australasia. Chiptech also announced a new CEO, veteran David Hammond, whose background includes leadership roles at UTC and Chubb. 

In M&A news, UnitedHealth Group bought the contested PatientsLikeMe, which runs an online service that helps patients find people with similar health conditions. PatientsLikeMe had raised $100 million in 2017, selling a majority stake to Shenzhen-based iCarbonX, backed by Chinese giant Tencent. That investment put the company under scrutiny by CFIUS–Committee on Foreign Investment in the United States. CFIUS is especially looking at Chinese investment in companies that deal with sensitive data, trade secrets, and national security–and coming down hard. Companies like Tencent are working with the Chinese government to amass millions of patient records and data points, with no regard for consent, and to build massive medical databases [TTA 17 Apr].

Tencent has multiple strategic investments in data-driven health companies, including an interesting Parkinson’s clinical trial in the UK with London startup Medopad, which developed an app that tests cognitive abilities across a series of tasks and captures it into what’s dubbed the Markerless Motion Capture and Analysis System (MMCAS). It is being tested on about 40 patients at a private mental health clinic in London called (appropriately) Dementech Neurosciences. Forbes

Mental health is hot, and Oxford VR, a spinout of Oxford University, is pairing with AXA HK and the Chinese University of Hong Kong (CUHK) to develop treatments for common mental health conditions such as social avoidance, anxiety and depressive symptoms. ‘Yes I Can’ uses virtual reality (VR) sessions over three to six weeks. In the true Chinese model (it’s free, but you don’t control where your data goes), it will also be offered to AXA’s corporate customers as part of their employee benefits services to drive better mental health outcomes in Asia. Mobihealthnews

Elsewhere in Asia-Pacific, Cigna Singapore launched a telemedicine service, Cigna Virtual Clinic, where users can access real-time doctor consults via a mobile app. Cigna is using Doctor Anywhere for the service. Telemedicine in Singapore is supervised by the Singapore Ministry of Health’s Licencing and Adaptation Programme (LEAP), “a regulatory sandbox initiative that allows the safe development of new and innovative healthcare models to be piloted in a controlled environment”. Insurance Business Asia

Back in the US, HIMSS is exiting its 30,000 square foot bricks-and-mortar office in downtown Cleveland’s Global Center for Health Innovation (a/k/a the Medical Mart). The exit will be over the next year. This is after a three-year extension of its lease inked in 2018. According to Crain’s Cleveland Business, their sources “described the move as a shift in strategy by the nonprofit that has gone through a leadership change.”

Fitbit and Teladoc: big IPOs, big questions

June 19, 2015 | by

This week’s big news (so far) of Fitbit’s $732 million initial public offering–the largest consumer electronics IPO ever–comes despite the Jawbone IP lawsuits [TTA 11 June]. Count us among those who question this ‘vote of confidence’ as raising unrealistic expectations for health tech by a fitness tracker not truly part of real digital health. Telemedicine provider Teladoc appears headed on the same track with an IPO estimated to come in at $137 million, probably by next week. This generous pricing (~$20/share) comes despite never being profitable in 13 years. Like Fitbit, Teladoc is facing lawsuits from its major competitor American Well on IP [TTA 9 June], with Teladoc asking the US Patent and Trademark Office to review the validity of several American Well patents. Both IPOs are on the New York Stock Exchange (NYSE). MedCityNews examines Fitbit and Teladoc.