TTA Snow Edition: Raises/SPACs pile up for Sharecare, Owlet, Zocdoc, Modern Health; airborne COVID detector passes test; RPM for clinical trials; Theranos and VA EHR updates

Weekly Alert

 

 

The snow won’t stop across the US, and neither do the big raises and SPACs this week. The spotlight’s on behavioral health, patient data storage–and Owlet’s baby monitoring sock. Can COVID be detected in the air?–looks like it. More ‘normal business’–a partnership for renal monitoring, care management, and Current Health’s RPM for clinical trials. Plus an update on VA’s Cerner EHR rollout and the Theranos trial.

GAO tells VA to postpone Cerner EHR implementation–but VA will be continuing (Typical government push-me-pull-you)
Deal and news roundup, 17-18 Feb: Sharecare goes SPAC for hefty $3.9 bn valuation; Humana Care Support pilots; AliveCor, AstraZeneca partner on renal, cardiac; Current Health RPM in clinical trials
The Theranos Story, ch. 70: the lab director turns Federal evidence (And nothing to do with Silicon Valley Lifestyles)
Airborne SARS-CoV-2 detection device for indoor use successfully tested (Useful for other bacteria and viruses too)
Funding roundup, 16 Feb: virtual mental health gains two (more) unicorns, Zocdoc’s fresh $150M, Owlet’s $325M SPAC (The eyeblinking raises and public offerings go on)

Only one truly dizzy deal — Signify Health — this week for a change. NHS apps try to get a handle on the pandemic and triage patients. Two US ‘neoinsurers’ raise big money, but one’s seeing the SEC and DOJ. 

News and deal roundup: Signify Health’s $564M IPO, RapidSOS’ $85M Series C, Poland’s Telemedico raise, Livongo’s Zane Burke to Bardavon
NHS touts COVID-19 Test and Trace app; Livi’s MJog notifies users of vaccine jab info (Trying to turn the corner)
Lasting effects of the pandemic lockdown on health and wealth (More Bad News)
‘Neoinsurer’ Oscar Health goes for $100 million IPO; Clover Health’s big SPAC under SEC microscope (A tale of two insurers, one a potential scandal)
NHS digital triaging app eConsult closes £7 million funding round (Deals spreading in UK)

The Dizzy Deals keep on coming with 23andMe going SPAC-y with Richard Branson for $3.5bn. HIMSS goes ‘hybrid’ for Singapore–but Las Vegas F2F is a ‘maybe’. Telehealth usage soared dizzily but unevenly during the early pandemic. Not so dizzily in the UK, B-Secur ECG algorithms get FDA clearance and Scotland’s Project Liberty advances. 

Belfast’s B-Secur obtains FDA 510(k) clearance for HeartKey ECG/EKG algorithm library (Plug and play?)
23andMe will go the SPAC route with Virgin Group in a $3.5 bn valuation (Ka-Ching!)
The shape of telemedicine during the first half-year of the pandemic: significant but wildly uneven usage (Income and speciality differences)
Short takes, 4 Feb: HIMSS 21 Global/APAC go ‘hybrid’; ATA announcements including virtual ATA2021; Hillrom acquires EarlySense monitoring tech
Communicare247 advances in Scotland’s Project Liberty social care with Stage 2 funding (Smarter homes for independent living)
Bluestream Health telehealth partners with Impresiv Health management consultants (Adding telehealth to client services)

Our third all-new Alert for 2021 has a bumper crop of 10 Dizzying Deals and equally dizzy debates about telehealth parity and coverage. And just as in the movies, Crime Does Not Pay (except in long prison sentences) for ‘telemedicine’ fraudsters being convicted as part of the $4.5 billion ‘takedown’.

Crime Does Not Pay–especially when defrauding Medicare of nearly $1 billion (Latest convictions in October’s National Health Care Fraud Takedown)
Telehealth parity, coverage, access debated in New Hampshire, South Dakota; CMS issues corrections to RPM in 2021 Medicare PFS rules (Will reimbursement advances stick?)
Funding, acquisition news roundup, round 2: Lyra Health’s $187M Series E, DarioHealth-Upright, GetWellNetwork-Docent Health, Hillrom-BardyDx (updated)
Funding news roundup: Philips buys Capsule, Hims’ SPAC + Privia partnership, Signify Health’s $100M IPO; closed funding for K Health, Aledade, Conversa Health

From Deals to COVID (only two scoops) to once again, Theranos and questions on Silicon Valley Startup Ethical Norms. The promise and peril of telehealth, especially in developing countries. Oddly, not much out of virtual editions of CES and JPM.

Comings, goings, and more: YouTube goes healthy, COVID vax distribution and EMA hack, IPO/M&A roundup, Japan’s health tech startups highlighted at CES
2021 predictions: telehealth law and if at all possible, stay away from FDA (US) (From law firm Foley; the wise advice on FDA is from Bradley Merrill Thompson)
COVID-19 and telehealth–promise or peril? And the perils of digital health in conflict countries and India. (JISfTeH’s latest edition)
The Theranos Story, ch. 69: Elizabeth Holmes ‘faked it till she made it’–like other Silicon Valley startups? (Updated) (Lifestyles of the Rich, Famous, and Busted)

Our first postings for 2021 focus on digital health’s funding Boom Town, also confirming that utilization gains made during the worst of 2020 are sticking. Haven, the three-headed hydra that was going to slay the ‘hungry tapeworm’, is closing. But never fear–CES and JPM are next week, with plenty of news to be expected.

Digital Health as Boom Town: 2020’s dizzying funding rounded up by Mercom Capital, StartUp Health (Funding fiddles merrily while COVID burns)
Telehealth claims rose 3,060 percent to October, settling in to over 5 percent of all claims–led by mental health (US) (Telehealth utilization sticks–but so is CoronaDepression)
New Year’s Deal and Event Roundup: Optum-Change Healthcare, Walgreens-Amerisource Bergen, December’s deal potpourri, CES and JPM (No sign of deal cooldown, and big events go virtual)
Haven finds no haven in healthcare, will close in February (Where lack of focus and an embarassment of egos will get you)

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Funding roundup, 16 Feb: virtual mental health gains two (more) unicorns, Zocdoc’s fresh $150M, Owlet’s $325M SPAC

Virtual behavioral health continues its hot run with two companies’ funding launching them into Unicorn Stratosphere valuations. The latest is San Francisco-based Modern Health which closed a $74 million Series D investment round, led by Founders Fund with participation from Lachy Groom. Total funding now exceeds $167 million over the past two years. The company claims a valuation of $1.17 bn plus status as the fastest entirely women-founded company in the US to hit the magic unicorn mark. Modern Health provides for about 220 mid-sized companies an app platform combining therapy, coaching, and self-guided courses in 35 languages. On 1 February, Modern Health acquired Kip, another mental health platform that was also woman-founded, for an undisclosed amount.

In January, corporate mental health provider, Lyra Health, gained a Series E of $187 million, bringing its valuation to $2 bn. Lyra claims 2 million members in large companies like Pillsbury, Uber, and Morgan Stanley. Talkspace, a direct-to-consumer digital therapy provider, went public earlier in January via a $1.4 bn SPAC. [TTA 29 Jan] According to Crunchbase News, among mental health startups, 141 were venture-backed within five years to the tune of $1.3 bn in investment. The pandemic and ‘lockdown loneliness’, as we’ve noted, kicked digital health and mental health funding into overdrive. FierceHealthcare, Crunchbase 

Patient appointment setter Zocdoc also gathered $150 million in fresh funding–what’s termed growth financing from Francisco Partners, bringing their total financing to $376 million in 10 rounds. Zocdoc has changed its model in the past two years from a subscription basis–priced per provider–to a per-booking charge. They also added virtual visits. Zocdoc now claims to be profitable and has grown its network by 50 percent in some states. It was one of the early healthcare unicorns, controversial in its business practices as far back as 2016, with customer churn, low margins, and high customer acquisition costs leading to unprofitability [TTA 11 May 2016, 21 Jan 2019], plus a former CEO suing about his ouster after eight years. HISTalk, Zocdoc release

Owlet socks it to a Q2 SPAC. Baby monitoring system Owlet Baby Care becomes a unicorn of just over $1 bn through a SPAC (special purpose acquisition company) merger with Sandbridge Acquisition Corporation, backed by Sandbridge Capital and PIMCO private funds. It will trade on the NYSE (OWLT) and close in Q2. Anticipated value is as much as $325 million through cash ($230 million) and concurrent private placement (PIPE) of common stock ($130 million). Owlet started in 2013 with a ‘Smart Sock’ (left) using pulse oximetry to monitor baby heart rate, oxygen levels, and sleep patterns with readouts via their app, but has expanded to include an Owlet Cam. Owlet stated 50 percent revenue growth in 2020 after approximately $50 million in net revenue for 2019. Amazingly, Owlet in seven years raised a modest $48 million through 27 investors concluding with a two-year Series B. Awwww-worthy indeed. Release, Mobihealthnews

Funding, acquisition news roundup, round 2: Lyra Health’s $187M Series E, DarioHealth-Upright, GetWellNetwork-Docent Health, Hillrom-BardyDx (updated)

Our cowgirl has been keeping busy rounding up more news on funding and acquisitions. Significance? Nearly all are major rounds only dreamed of a year ago for these relatively small companies boosting valuations into the stratosphere. The acquisitions also extend these companies into multiple lines of business.

Lyra Health, a mental health therapy benefit company for employers, closed an additional $187 million in a Series E round led by Addition Capital. This adds to a torrid 2020 $185 million Series C and D bringing their total funding to $475 million. The company claims a valuation of $2.3 billion and doubling its customer base in 2020 to 2 million members, with marquee clients such as Genentech, Morgan Stanley, and Zoom. Lyra Health uses cognitive-based therapy (CBT) models using virtual self-care, coaching, and therapists. Also announced was a partnership with ICAS World, an employee-assistance provider. Lyra is one of many companies in an increasingly crowded category using the CBT model to save employers and payers money on employee and member mental health with and without chronic conditions such as diabetes. Earlier this month, the Talkspace app, which focuses on direct to consumer therapy, announced they were going public through a ‘blank check’ SPAC with Hudson Executive Investment Corp, in a deal valued at $1.4 billion, including debt. Release, Mobihealthnews

DarioHealth, an Israeli-US company concentrating on digital diabetes and hypertension management, extended into musculoskeletal (MSK) therapeutics with the $31 million acquisition of Upright Technologies Ltd., another Israeli-US company. Upright uses a $100 sensor that provides biofeedback and vibration reminders to correct posture plus digital coaching. Last year, Upright was heavily advertised on US television. The buy will transfer to Upright $1.5 million in cash and $29.5 million in stock, and is expected to close in about 10 days. Dario also completed a $70 million private placement for 3,278,688 shares of its common stock at a purchase price of $21.35 per share. Dario has about 150,000 users and Upright 90,000 users. Dario is projecting a 2020 revenue of $7.6 million. Release, Mobihealthnews

GetWellNetwork, a relatively small player in patient engagement and communications in the inpatient care journey, announced it has acquired patient-messaging company Docent Health for an undisclosed sum, beefing up capabilities in data analytics and directing patients to additional services. According to Crunchbase, GetWellNetwork has funding to date of $19 million.  Release, Mobihealthnews

Wrapping it up is cardiac monitoring giant Hillrom’s acquisition of Bardy Diagnostics for $375 million plus future potential payments based on the achievement of certain commercial milestones. Hillrom is also acquiring net operating losses valued at more than $20 million and 230 employees. The BardyDx Carnation Ambulatory Monitor (CAM) is a lightweight cardiac patch monitor for heart rhythm diagnostics using P-wave-centric ECG detection. The irony here is that BardyDx positioned itself squarely against Hillrom’s Holter monitors. Nothing like buying out the competition! Release, MedCityNews

Kickstarting the 1st week of summer: news from all over

No deal yet between insurer giants. Cigna turned down a $53.8 billion bid from Anthem. According to Healthcare Finance, concerns ranged from corporate governance problems, their membership in the Blue Cross Blue Shield Association, the probable chairman’s (from the Anthem side) qualifications and data security (ahem!). Given that Anthem’s 60 million record breach was an inadvertent inside job [TTA 11 Feb], the last is perfectly understandable. But the door appears to be open for the emollient of additional money (to mix a metaphor). Extra: a tart take on this from the WSJ…..Jaguar is looking to increase driving safety by reading your brain waves to detect if you are distracted or daydreaming, via sensors embedded into the steering wheel. It’s based on technology used by NASA and the US bobsled team. They are also working on mood enhancing lighting and a predictive system to speed your interactions with the dashboard to minimize eyes off the road. But will these detect if you feel good to be bad, as their adverts say? Gizmag….The FT gets into digital health via business, profiling startups such as Lyra Health, Genomics England and Heartflow, as well as 23andme and Google X (including the glucose-detecting contact lens we profiled 18 months ago. Hat tips to Eric Topol and David Doherty (mHealth Insight) via Twitter….The NY Times looks at the dark side of ‘senior independence’ with a group of NYC homebound seniors, but other than tut-tutting the desire of older mainly limited income New Yorkers to remain in familiar surroundings, our ‘national celebration of independence’ (!) and not to be institutionalized (their words), the article doesn’t offer much in the way of solutions. And solutions are badly needed for the nearly 2 million over 65 who rarely or never leave their homes, because not all of them will be in assisted living. Hat tip to Joseph Coughlin of MIT AgeLab via Twitter…. But in Australia, they’re exploring ‘future proofing’ and ‘dignity enabling’ homes for an aging population to make them more livable and accessible, via landscaped ramps, larger bathrooms, and sensor rich floors that connect to gait tracking and analysis. Smart Homes 2.0. Sydney Morning Herald…..Neil Versel over at his new MedCityNews stand reports on Doctor On Demand‘s test of tablet-based medical kiosks adjacent to the pharmacy department at four Wegman’s grocery stores here in the Northeast. Is Weis Market far behind?….And Fitbit has a bit part in ‘Law and Order’…well, not the TV show in perpetual reruns, but in a real-life case in Lancaster County, Pennsylvania which is not all Amish farms, black carriages and the so-called Amish Mafia. The police used Fitbit activity data to determine that a local resident (and Fitbit wearer), who claimed she was raped by a stranger, staged the crime scene with overturned furniture, a knife, and a bottle of vodka in her home. ABC27 News via David Lee Scher.