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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23andMe sold to Regeneron for $256M in court-supervised bankruptcy, sans Lemonaid. And is it worth it? (Updated 27 May for delisting)

May 21, 2025 | by

Most of 23andMe bought for a lot more than one could have thought–and why? Yesterday, the board of 23andMe confirmed that they have a court-approved definitive agreement for the sale of their core genomics units to Regeneron Pharmaceuticals, Inc., a publicly traded (Nasdaq) biotech company based in Tarrytown, New York. The purchase price of $256 million includes the Personal Genome Service (PGS) and Total Health and Research Services business lines–but not Lemonaid. 23andMe will be operated as a wholly owned direct or indirect subsidiary.

The asset auction was completed on 16 May. The acquisition by Regeneron remains subject to approval by the US Bankruptcy Court for the Eastern District of Missouri, approval under the Hart-Scott-Rodino (HSR) Act, and customary closing conditions. The bankruptcy court will hold the approval hearing on 17 June. With the court’s and HSR approvals, the closing is anticipated to be sometime in Q3 this year, which is fairly rapid.

What didn’t sell to Regeneron or anyone else was Lemonaid, their DTC telehealth/prescribing business. It will be wound down “in an orderly manner, subject to and in accordance with the agreement” according to 23andMe’s press release. The lack of an approved bid for Lemonaid is puzzling, given the popularity of DTC telediagnosis and teleprescribing of various remedies stimulated by GLP-1 based weight loss. Perhaps Lemonaid’s business (or lack thereof), never reported by itself, along with its 2021 acquisition for an inflated $400 million ($100 million cash/$300 million in now-worthless stock), contributed. According to early April reports, Nucleus Genomics was interested in Lemonaid, to combine it with their own genetics marketing to add treatment to the ‘one and done’ of genetics testing, roughly along the lines of 23andMe’s original vision.  Nucleus had made a pass at 23andMe in 2024 but never got beyond the talking stage. [TTA 3 Apr]

Required in the Regeneron sale and otherwise agreed are:

  • Adherence to data privacy policies both under 23andMe’s privacy policy and ‘applicable law’. Presumably that also adheres to FTC chairman Andrew Ferguson’s statement re privacy and data security.
  • A court-appointed, independent Consumer Privacy Ombudsman. The CPO is responsible for examining the transition and the impact, if any, on consumer privacy once it is approved. Regeneron, a large and long established company, has a track record and programs in genetics research. The report is due to the court by 10 June, one week prior to the approval hearing.
  • Regeneron is offering employment to 23andMe’s remaining employees within the purchased business units. This promise may be less charitable than it seems. Two weeks ago, 23andMe filed a WARN notice with the California Employment Development Department that it plans to terminate 250 employees and close its San Francisco office by 17 June. Whether the successful sale will halt the layoffs in part or totally is not yet known. Preceding layoffs and operational closures had whittled down the employee group to an undetermined number.  SF Chronicle

Regeneron’s Aris Bara, MD, senior vice president and head of the Regeneron Genetics Center, commented on security in their statement:  “As a world leader in human genetics, Regeneron Genetics Center is committed to and has a proven track record of safeguarding the genetic data of people across the globe, and, with their consent, using this data to pursue discoveries that benefit science and society. We assure 23andMe customers that we are committed to protecting the 23andMe dataset with our high standards of data privacy, security and ethical oversight and will advance its full potential to improve human health.” Their Genetics Center has used in research deidentified data from nearly 3 million people.

Debtor-in-possession (DIP) financing continues. At the time of the Chapter 11, JMB Capital Partners had provided DIP financing of up to $35 million [TTA 28 Mar]. This continues with a second tranche of financing for an unknown amount.

Why did Regeneron make such a generous offer? What did they see? 23andMe was a company with essentially zero value, where assets and liabilities canceled each other out possibly as early as 2018 (Sergei Polevikov), three years before it went public. The only bids prior to the Chapter 11 were made by co-founder and then CEO Anne Wojcicki, with two take-private offers estimated at $12 million from her with the highest but short-lived bid of $71 million (Wojcicki with New Mountain Capital) [TTA 4 Mar]. Wojcicki, like other shareholders, has no chance of reward from this sale, unless some arrangement was made on her class of stock (purely speculative by this Editor).

The value to Regeneron is 1) more genetic data on 15 million users, minus the unknown number that deleted their data and samples as advised by multiple states or never provided consent, 2) research from terminated operations (e.g. drug discovery), and 3) survey data. 85% of 15 million users consented at the time to individual de-identified data being used for research. That research included an optional survey which added to their profiles. Once you consented to answering surveys, every time you visited the research page, you’d get questions to answer until they were all answered. How many of close to 13 million research-consenting users took the surveys? Reports deduced that deleting data and samples didn’t delete voluntary survey information.

The bottom line:  To start, Regeneron is a $66 billion company. $256 million is, basically, pocket lint. But what makes 23andMe a smart buy for them, at least on the surface?

  • 85% of 15 million users consented to have their data used for research–12.75 million. (We will leave aside the question that this was ‘meaningful consent’, as the Electronic Privacy Information Center termed it in Recorded Future News.)
  • Let’s assume that 15% took the advice of their attorneys general and deleted (or will delete) their data, or that data is somehow compromised. Subtract 1.9 million.
  • That is data on 10.85 million users–not counting the unknown amount of deidentified survey information from the data deleters that may or may not be accessible.
  • Regeneron is acquiring genetic data and some research at $23.60 per user. That raw number does not count the value of other information and research, nor of talent being acquired in the company. This Editor does not know the going rate for genetic data, but it seems inexpensive to me. 

Given that Dr. Bara and the Genetics Center have been doing research using a database of only 3 million or less, Regeneron hit a jackpot of pre-consented data. That may make Ms. Wojcicki’s prediction back in December 2024 in a CBS interview that the company would be thriving in a year and ‘transforming healthcare’ in five. It just won’t be hers anymore.

Update 27 May: 23andMe announced that will be voluntarily delisting from Nasdaq on or about 6 June. The stock was suspended from trading on 31 March, a week after it filed for bankruptcy. Oddly, Nasdaq usually files the Form 25 Notification of Delisting with the Securities and Exchange Commission (SEC) but in this case it has not, so 23andMe is filing. CNBC, 23andMe release

This story is developing.

These just in: drug compounders sue FDA over semaglutide scarcity removal; Sycamore’s Walgreens buy plans begin to show

February 27, 2025 | by

What the telehealth prescribers can’t do, the compounders are. A major drug compounder association, the Outsourcing Facilities Association, along with member North American Custom Laboratories, LLC, both based in Texas, filed suit yesterday (24 February) against the FDA to vacate the final action removing semaglutide, the active ingredient in GLP-1 drugs, from the shortage list. The FDA announced that it was being removed from the shortage list effective April-May, after months of compounders legally creating semaglutide-based weight loss drugs as permitted during the shortage. This was certainly good news for Novo Nordisk, the pharmaceutical company that developed and markets Ozempic and Wegovy [TTA 25 Feb].

The compounding was a boon for telehealth providers such as Hims and Hers, Ro, 23andMe (Lemonaid), Future Health, Weight Watchers, Lark, and many others. It allowed them to customize injectable formulations for customers on weight loss programs at a far lower cost than standard branded products. The FDA allows this only during times of shortage (compounded by Section 503A pharmacies and Section 503B outsourcing facilities as “essential copies” of FDA-approved drugs). Exceptions are also made if the standard drug is in some way inappropriate for the patient who then medically requires a customized version, e.g. with adjusted dosage, method of dosing, or added/deleted ingredients, but these are not ‘mass’ circumstances or situations. 

Among the grounds presented in the suit against the FDA are that the shortage is still going on with delays in prescription filling, leading to patient harm; that FDA’s delisting was arbitrary without the required notice with public comment nor was it published in the Federal Register; and that it is ‘arbitrary and capricious’. Novo Nordisk has admitted publicly that supply constraints could still exists. 

Continued ‘customization’ is vital to telehealth prescribers’ revenue, while branding is vital to the pharmaceutical developers undercut by compounding. In 2024, Hims alone earned $225 million in revenue from compounded semaglutide and other GLP-1 type drugs. Both Novo Nordisk and Lilly (Zepbound) have pushed back on the compounders on safety and risk, along with lower prices in new delivery types such as vials versus autoinjectors.

The suit was filed in the US District Court for the Northern District of Texas. Biopharma Dive

More intriguing details if Sycamore Partners takes Walgreens Boots Alliance private. Financial Times reported via Reuters that according to the usual “people familiar with the matter”, Sycamore’s plan is to separate WBA into three parts, like Gaul: US retail pharmacy, Boots UK, and US Healthcare (VillageMD, CareCentrix, and Shields Health Solutions). They would have distinct capital structures. There’s minimal information beyond that. Sycamore is not expected to have difficulty financing the take-private, and WBA chairman Stefano Pessina is expected to have an ownership stake. The news drove WBA shares up today about 5% and 10% in the last five days. But the news seems to be moving along. VillageMD’s on the market is assumed but it is not certain any sale would complete in time. Crain’s Chicago Business

Bad News roundup: DOJ drops the hammer on UHG-Amedisys, 23andMe lays off 40% and closes therapeutics, Lyra Health lays off 2% in restructuring, Forward primary care + kiosks shuts down abruptly

November 14, 2024 | by

Shoe drop! The long-anticipated Department of Justice (DOJ) lawsuit against UnitedHealth Group and Optum to prevent the acquisition of  home health and hospice operator Amedisys was filed yesterday (12 November) in the District of Maryland. UHG’s offer to acquire Amedisys was made in June 2023 for $3.3 billion in an all-cash deal, but approval was held up in DOJ review ever since. Even with location divestitures proposed in July to VitalCaring Group to reduce anti-trust concerns with Optum’s home health operations (acquired with LHC Group), UHG remained a DOJ target. The civil lawsuit was filed by DOJ together with the Attorneys General of Maryland, Illinois, New Jersey, and New York. No timeline is provided in the release.

The rationale cited is of course anti-trust and elimination of competition between Amedisys and UHG’s Optum. “We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” said Attorney General Merrick B. Garland. The fact that the US Attorney General was quoted first in their release indicates the importance of the case to the DOJ. It’s also a race to the finish as come 20 January 2025, there will be a new president appointing a new AG immediately.

The DOJ states that both companies are “fierce competitors” and that the divestiture is insufficient. “The proposed divestiture does not alleviate harm in over 100 home health, hospice, and labor markets, which generate at least a billion dollars in revenue annually, serve at least 200,000 patients, and employ at least 4,000 nurses.”  Their case is well-built in this Editor’s view. From the release:

 UnitedHealth’s market share after the transaction would make the merger presumptively illegal in:

    • Hundreds of local home health care markets, with an annual volume of commerce exceeding $1.6 billion annually, in 23 states and the District of Columbia;
    • Dozens of local hospice markets, with an annual volume of commerce exceeding $300 million annually, in 8 states; and
    • Hundreds of local markets for home health and hospice nurse labor, employing at least 8,000 nurses, in 24 states.

The lawsuit also seeks civil penalties against Amedisys for falsely certifying compliance with its obligations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) by failing to produce millions of documents or disclosing the deletion of other documents. For each day that Amedisys was in violation of the HSR, DOJ is seeking a fine of up to $51,744 daily. Amedisys was originally set to be acquired by OptionCare, which does not directly compete in home health, but UHG won a bidding war.

As this Editor said at the time of the Change Healthcare acquisition win against DOJ in Federal court (and we know how that turned out long term), “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing.” FierceHealthcare

23andMe continues their long jump down to…who knows where? CEO Anne Wojcicki is minusing out 200+ employees or 40% of its remaining workforce, and fully shuttering its therapeutics development unit. The latter is running two clinical trials which will be wound down ‘as quickly as practical.’ These cuts will save $35 million annually but incur $12 million in one-time severance and termination-related costs. The much-touted therapeutics discovery unit was shut in late summer [TTA 14 August].

What’s left? Not much–the Lemonaid remote prescribing unit, with an entree into GLP-1 prescribing, some published studies, a new AI chatbot called “DaNA”, and a longevity service dubbed Total Health. During their Q2 FY2025 earnings call and release, revenue sank to $44 million versus prior year’s $50 million (-12%)–slightly from Q1’s $40 million–operating expenses reduced 17% to $84 million versus prior year’s $101 million, but the company remained firmly in the red with a GAAP loss of $59 million, 21% less than last year’s $75 million and reduced versus Q1’s $69 million loss. The board, as previously noted, now consists of three financial non-healthcare people, replacing the seven who resigned. Meanwhile, customers wonder about the security and use of their genetic and personal information [TTA 8 Nov]. Release, AP, Healthcare Dive

Another telemental health unicorn, Lyra Health, laid off 2% of staff in a restructuring. 77 people on non-clinical operational teams were released. Some may receive severance for 12 weeks with health benefits, according to one of the anonymous released. Noted in the FierceHealthcare article are reported changes at Lyra, including larger provider caseloads demanded and deletion of seven core values that put clients and clinicians first. Lyra’s last raise was a $235 million Series F in January 2022 for a total of over $910 million (Crunchbase). That high valuation of $5.6 billion has been tough to maintain in the current funding environment–and to not take a down round that affects valuation. 

Health kiosk/primary care practice Forward goes backward, shuts immediately. Nearly on the first anniversary of a $100 million Series E raise from Khosla Ventures and four other investors to deploy self-serve kiosks (left) in major cities [TTA 17 Nov 23], tech-driven primary care practice Forward announced its sudden closure today, effective immediately. What remains on their website is a goodbye-and-good-luck note to patients canceling appointments and zeroing out its app. Patients can email clinicians for care support until 19 December. There is no information available on accessing records nor transferring to new providers, leaving patients in the lurch. 200 employees will lose their jobs immediately as well.

Forward had primary care practices in 14 markets such as New York, San Francisco, and others. Last year it claimed 100+ primary clinicians at 19 locations, with patients paying $150/monthly (no insurance accepted) for un­lim­it­ed vis­its to For­ward’s pri­ma­ry clin­ics. (Refunds, anyone?) The CarePods self-serve kiosks were designed to be self-contained units placed in malls, offices, and gyms. Inside, subscribing patients could access AI-powered health apps for disease detection, biometric body scans, blood testing in disease areas, including diabetes, hypertension, weight management, and mental health (depression and anxiety). They were scheduled last year to be deployed in the San Francisco Bay Area, New York, Chicago, and Philadelphia. Nice idea, but like the earlier HealthSpot Station of 2012-2016, they are equally defunct.

In its eight-year life, Forward had raised $325 million (Crunchbase), which also reported last year’s Series E as only $75 million. At the time of their Series D, Forward was valued at over $1 billion and had a roster of flashy investors such as music’s The Weeknd, Salesforce’s founder Marc Benioff, actor Matthew McConaughey, Eric Schmidt, and Softbank. What’s stunning? Reports indicated that it only gen­er­at­ed un­der $100 mil­lion in to­tal rev­enue since its founding. There has to be more to this, like lawsuits….    FierceHealthcare, Endpoints News

Ad tracker action heats up: Congress questions DTC telehealth companies on sensitive patient health data sent to advertisers

February 9, 2023 | by

It looks like telemental and addiction counseling telehealth sites are routinely sending patient information to media ad platforms–Google, Facebook (Meta), TikTok, Microsoft, Snapchat, Bing, Pinterest, and Twitter–to serve ads back to patients. Four Senators sent letters this week to three telehealth companies treating patients: Monument (alcohol addiction), Workit Health (opioid and alcohol), and Cerebral (ADHD and other mental health). The letters questioned the use of ad trackers (pixels) such as Meta Pixel that collect information from telehealth sites and then use the information to send users targeted ads based on that information. Except that this is not about curtains or shoes, but medical treatment. 

Kicking this off was The Markup/STAT study in December, examining 50 telehealth websites.

  • 49 of 50 websites shared user/patient tracking data to advertising platforms. This captured data as routine as URLs and IPs, and as extensive as name, email, phone, questionnaire answers, when users created accounts, and cart behavior, such as a prescription medication or treatment plan.
  • 35 were found by the study to have trackers sending individually identifying information to at least one media platform that included names, email addresses, and phone numbers
  • 25 had at least one tracker that indicated when users added prescription drugs and other items to their cart or when they checked out with a subscription for a treatment plan
  • 13 had at least one tracker that collected patients’ answers to medical questions

Ad trackers then send that information to platforms, which then serve targeted ads back to the telehealth companies’ users and patients. For the telehealth companies, the data is monetized. Because ads are served, there is a revenue stream back to the telehealth companies. 

From the senators’ letter: “This data is extremely personal, and it can be used to target advertisements for services that may be unnecessary or potentially harmful physically, psychologically, or emotionally.” Markup/STAT

Users may well assume that because the telehealth companies eventually connect them to a provider covered by HIPAA, or sends them a prescription from a provider, such as migraine treatment, that their data is protected along the entire journey. That assumption has now been demonstrated to be incorrect. This included major, heavily advertised DTC providers such as Lemonaid, Keeps, Hims & Hers, Talkspace, and Roman (Ro). Many of them are now examining their pixel policies.

The December article linked above has all 50 companies and what information they found was sent to ad platforms. The only website that did not was Amazon Clinic–brand new and of course not wanting to share their information outside of Amazon.

This follows on the FTC’s still to be approved by a Federal court, but apparently successful $1.5 million action against med discounter GoodRx using the never-used-before Health Breach Notification Rule, enacted in 2009 [TTA 3 Feb]. 

Why this is significant: first, the FTC action using an old rule, followed by the senators targeting three prominent (and in Cerebral’s case, beleaguered) telehealth companies, and the red meat documentation provided by The Markup/STAT study provide grounds for endless follow-up by not only Congress, but also private and public (DOJ) litigation. Stay tuned.