Weekend roundup: NHS Dumfries (Scotland) cyberattacked; delisted Veradigm’s strong financials; One Medical NY patients’ coverage clash; Suki voice AI integrates with Amwell; Legrand and Possum extended; Zephyr AI’s $111M Series A

March 15, 2024 | by

NHS Scotland’s Dumfries and Galloway region reported on Friday 15 March a “focused and ongoing” cyberattack affecting their 148,500 patients. Information is light at this point, but the region has reported system incursions that may involve the acquisition of patient data. “We have reason to believe that this could include patient-identifiable and staff-identifiable data.” Police Scotland, the Scottish Government, the National Cyber Security Centre, and the NHS have all been notified along with law enforcement. This story is developing. NHS D&G cyberattack page, BBC News, The Record, Cybercrime Magazine Top News 15 Mar

Delisting from Nasdaq hasn’t hurt Veradigm’s results in the slightest. As TTA and others noted in late February, Veradigm management telegraphed their strong financial state while announcing the acquisition of ScienceIO, an AI data company. These are all unaudited revenue numbers:

  • For 2023, revenue between $608 million and $622 million, net income from continuing operations is estimated between $49 million and $58 million.
  • For 2024, their estimate is for revenue growth ranging from $620 million to $635 million, with adjusted EBITDA of between $104 million and $113 million, with net cash of $140 million subsequent to the ScienceIO acquisition.

Veradigm’s repositioning post-ScienceIO will be around healthcare intelligence with scaled and proprietary LLM products supporting physicians & providers, payers, and life science research enterprises. Release

Now about those 2022 and 2023 financial reports that went sideways due to their financial software. Lee Westerfield, their interim chief financial officer, stated at the Barclays 26th Annual Global Healthcare Conference that the audit process is not only “prolonged” but also not fully in the company’s hands but with auditors. While they won’t say it out loud, it seems that Veradigm hasn’t let the Nasdaq delisting cramp their style, nor making money, at all.  Crain’s Chicago Business

New York-area One Medical patients caught in the UnitedHealthcare-Mount Sinai clash. Mount Sinai, one of the leading hospital systems of the New York metro, is in a dispute with UnitedHealth on their upcoming insurance contract.  Mount Sinai requested higher payments for hospital stays and physician visits, not unexpected given the duration of most of these contracts span several years and inflation has bitten hard over the past two years, but UHG rejected this. The lack of a contract as of Thursday 14 March means that as of 22 March, patients of Amazon-owned One Medical practices in the New York area with UnitedHealthcare and Oxford insurances (Oxford is an insurance brand of UHG) will not be in-network if receiving services through Mount Sinai’s hospital network. One Medical is part of Mount Sinai’s clinically integrated network (CIN) but apparently this has no impact. This Editor is betting that Amazon did not figure on provider/payer disputes of this type–it may be the first of many affecting One Medical with hospital networks. Becker’s

Some good news from Amwell around their new partner, Suki AI. The Suki voice-enabled AI powered digital assistant will be integrated into Amwell’s platform Converge. The voice assistant will not require a separate app as fully integrated into Converge and into Amwell providers’ existing workflows. Suki Assistant leverages natural language processing to help clinicians complete notes 72% faster on average, according to Suki, and also supports coding and dictation. A date was not specified for implementation. Suki has partnered with with multiple EHR systems, including most recently Meditech. The Amwell platform is used by providers at more than 55 health plans covering 90 million lives, plus 2,000 hospitals and health systems. Suki release, Healthcare IT News

In more partner news in the UK, Legrand and Possum have extended their now 14-year reseller agreement. Possum continues as the exclusive reseller for the NOVO range of Legrand telecare products in the UK and Ireland. Read more about it on TSA Voice and UKTelehealthcare. While you’re there, our UK Readers can also seek our supporter UKTH’s continued training events and resources on the 2025 Digital Switchover. Legrand is a long-time advertising supporter of TTA.

Zephyr AI raises $111 million in Series A financing. Revolution Growth, Eli Lilly & Company, Jeff Skoll, and EPIQ Capital Group financed a bountiful Series A scarcely seen since 2022. As you’d expect, Zephyr has this year’s flavor, having integrated AI into precision medicine for oncology and cardiometabolic disease. Zephyr’s earlier seed round of $18.5 million was raised in March 2022 (Crunchbase). From the release: “The new funds will enable Zephyr AI to further enhance its analytical speed and fortify its extensive collection of training and validation data sets. Moreover, the funds will support the expansion of the company’s scientific and commercial teams to expedite the delivery of its rapidly growing pipeline of insights to the market.”

Roundup: Walgreens’ new chief legal officer; Digital Health Collaborative launched; fundings/M&A defrosting for b.well, R1 RCM, Abridge, Reveleer; Veradigm likely delists, buys ScienceIO–mystery? (updated)

February 27, 2024 | by

Walgreens’ CEO Wentworth’s final add to Executive Committee named. Lanesha Minnix was announced on Monday as the company’s new global chief legal officer and EVP, effective 15 April. She comes from being general counsel and corporate secretary for Ecolab, a Fortune 500 water, hygiene and infection prevention company. As chief legal officer, she will oversee Walgreens’ global legal, compliance, corporate governance and corporate security functions. Ms. Minnix succeeds Danielle Gray, who left in January to “pursue an external opportunity” (Reuters). Yahoo Finance from PR Newswire

A new organization to ‘advance digital health adoption’ launched last week. The Digital Health Collaborative, a coalition of 14 healthcare and consumer organizations, is committed to “evidence-based, cost-effective, equitable digital health solutions.” Their initial activities are expected to include a national purchaser survey, grantmaking, and convenings. The DHC is supported by the Peterson Health Technology Institute (PHTI) and led by Caroline Pearson, also the Executive Director at the NYC-based Peterson Center on Healthcare.

The 14 organizations backing the DHC are: AARP, AHIP, Alliance for Connected Care, American Medical Association (AMA), American Telemedicine Association (ATA), Consumer Technology Association (CTA), Digital Medicine Society (DiMe), Digital Therapeutics Alliance (DTA), HLTH Foundation, Innovation and Value Initiative (IVI), International Consortium for Health Outcomes Measurement (ICHOM), National Alliance of Healthcare Purchaser Coalitions, The National Committee for Quality Assurance (NCQA), and RockHealth.org.

The DHC with support from PHTI has established a Research and Impact Fund for aligned research and programs. The first grant was provided to DiMe for its Integrated Evidence Plans for Digital Health Products. While a fine list, this Editor notes no payers or hospitals (end user groups) or cybersecurity organizations to advocate for digital health security. DHC release

Some funding and M&A action…zounds!

b.well Connected Health’s Series C clocks in at $40 million. Leavitt Equity Partners led the raise which tops up b.well’s funding to $98.8 million. Their last funding round was a $32 million Series B in July 2021 with HLM Venture Partners as the lead. b.well markets its FHIR-enabled Connected Health platform to unify healthcare data, solutions, and services for end users at payers, providers, and employers. Joining the board are three new members: Andrew Clark, Managing Partner at Leavitt Equity Partners, Ryan Howells, Principal at Leavitt Partners and Executive Director of the CARIN Alliance, as an independent director, and Hon Pak, MD, Head of Digital Health at Samsung. Samsung is a key partner of b.well. A key joint project involves giving Galaxy smartphone users control over their longitudinal health records, as well as proactive, personalized health insights via Samsung Health, with easy access to care from providers including Walgreens, Northwell Health, Lee Health, ThedaCare, and others. Is the lettered round an indicator of Better Times ahead? Release, FierceHealthcare

R1 RCM may go private via investor group. An investor group led by New Mountain Capital is offering to take the revenue cycle management (RCM) company private to buy up shares they do not already own at $13.75 per share. New Mountain holds 32.43% of shares and is working with an investment group that includes another major shareholder TCP-ASC (TowerBrook Capital Partners that has a 29.64% stake, plus Ascension Health Alliance–Ascension accounts for nearly half of R1’s income), putting them at over 62% if TowerBrook goes all in. Mr. Market has weighed in and says that the offer price is already obsolete. It  represented a tidy premium to Friday’s close at $11.10, but the current trading on Nasdaq is well above the bid at $14.45. Current shareholders such as Coliseum Capital Management LLC, one of the five largest shareholders, have already stated to the board that the company is undervalued at the offer price. R1 traded in the $18 as recently as last summer, but hit a headwind at end of year with the loss of customer Pediatrix on implementation issues. But based on their 2023 performance despite this, the other investors are making a good case. R1 RCM is the largest publicly traded RCM company for hospitals and healthcare systems. They closed 2023 profitably with net income of $3.3 million, flipping a $63 million 2022 loss, on a revenue increase of nearly 25% to $2.3 billion.  Reuters, Healthcare Dive

Abridge, a clinical documentation and ‘clinical conversation’ company, is enjoying a lush Series C of $150 million led by Lightspeed Venture Partners and Redpoint Ventures leading five other investors. Abridge has a conversational AI technology using LLM and speech recognition to ease the burden of taking notes during the doctor’s appointment and states it is fluent in 14 languages across 55 medical specialties. Its last raise was a $30 million Series B just last October. A good reason why both is that it is fully integrated within Epic. According to HISTalk, Lightspeed advisor Paul Ricci is a former chairman and CEO of Nuance, one of Abridge’s biggest competitors, so one has to assume he knows what’s what inside this technology. Axios

Another NLP and AI powered healthcare data analytics company, Reveleer, is also topping its tanks with a $65 million raise. Hercules Capital led the venture round on a total funding of $208 million. Release

Veradigm nears a delisting on Nasdaq due to reporting–but plans acquisition of ScienceIO, in what has to be a first. The continuing delisting watch on Veradigm (the former Allscripts) is fading to black with the company anticipating its failure to file needed financial statements with Nasdaq. Its stock continues to decline (today at $7.32 as of noon ET).

Since March 2023, Veradigm has had trouble with required reports due to faulty financial software and has begged extension after extension. The required reports due by Tuesday 27 February are for 2023 quarterlies on form 10-Q and its annual 2022 report on form 10-K.

Veradigm is also facing a slew of shareholder lawsuits on the decline in its share price [TTA 3 Jan]. To counter this, Veradigm announced today (27 Feb) that the board of directors is adopting a limited duration stockholder rights plan that issues by means of a dividend one preferred share purchase right for each outstanding share of Company common stock to stockholders of record on the close of business on 8 March 2024. This becomes exercisable only if a person or group secures beneficial ownership of 10% or more of the outstanding shares in the next year. The rights plan is obviously designed to compensate shareholders in the event of a takeover not approved by the board (i.e. a hostile takeover) via accumulation of stock and make a sale to an unapproved buyer less attractive. Release, MarketWatch/WSJ

Apparently Veradigm is healthy and profitable, according to analysts reported in Healthcare Dive. The company estimated unaudited revenue between $608 million and $622 million for its fiscal year 2023. Net income from continuing operations is estimated between $49 million and $58 million, according to the filing. This, coupled with its business as a data company, further adds to the mystery around their reporting to Nasdaq.

Simultaneous to the delisting, Veradigm announced today that it is acquiring yet another company, ScienceIO, that is (surprise!) an AI company. Veradigm will leverage ScienceIQs proprietary large language models on Veradigm’s rich data set and more. Acquisition cost of $140 million in cash (subject to customary adjustments for cash, indebtedness, working capital and transaction expenses) has approximately $44 million deferred, substantially all of which is payable in installments on each of the first three anniversaries of the closing date. Release

This is not the first acquisition that Veradigm has made with the delisting hanging. In January, Veradigm announced the acquisition of Koha Health, which specializes in orthopedic/musculoskeletal (MSK) revenue cycle management (RCM).

Updated 28 Feb: Nasdaq is delisting Veradigm effective 29 February. It will continue to trade OTC under MDRX until whatever time they become compliant with their reports. Veradigm is not appealing at this time. Healthcare Innovation. Veradigm release

News roundup: Veradigm facing Nasdaq delisting, UpHealth files Chapter 11, Virgin Pulse-HealthComp $3B merger, MidiHealth’s $25M Series A, Inbound Health’s $30M Series B

September 29, 2023 | by

Veradigm way out of compliance with Nasdaq, faces delisting. Nasdaq apparently is facing the end of its patience with Veradigm (the former Allscripts) and is moving to delist the company from the exchange as of 20 September. Veradigm plans to appeal to the Nasdaq Hearings Panel to gain an additional 22 days. Starting in March, the company has attributed to a massive financial software flaw the delay of its annual report for 2022, a restatement of FY 2021, and reporting of their 2023 Q1 and Q2 financials to the Securities and Exchange Commission (SEC). All these are required by Nasdaq for listing. After multiple extensions begged from Nasdaq since June, whether 22 days will make any difference is doubtful. Veradigm closed today at $13.38. Stay tuned. Release, Becker’s Health IT, TTA 23 Aug

UpHealth Holdings filed Chapter 11 bankruptcy, to reorganize. The parent company UpHealth Inc. claims this was not due to operational shortfalls, but to a court decision that found that the company owed investment bank Needham & Company $31 million in fees as a result of its November 2020 SPAC [TTA 26 Nov 2020]. The company release is unusually coy but states that the Chapter 11 was necessary to “mitigate the financial impact of the trial court’s decision” and was not the result of operation nor will affect operations. This was a more complicated than usual SPAC that merged the public entity, GigCapital2 Inc., with UpHealth Holdings and Cloudbreak Health to create a $1.3 billion (at that time) digital health company, UpHealth Inc., with care management platforms and virtual care infrastructure plus behavioral health services. Cloudbreak Health is not in Chapter 11. The UpHealth Inc. stock on NYSE stopped trading with the bankruptcy on 19 September and is currently at $0.98 from a 2021 peak of $28. Another cracked SPAC.  MarketWatch, HIStalk.

In more cheerful funding news:

Employer wellness platform Virgin Pulse and benefits analytics platform HealthComp to merge. The $3 billion deal creates a combined entity that will improve outcomes and lower costs for primarily self-insured employers and members through the Homebase for Health platform. Chris Michalak of Virgin will serve as CEO of the combined entity upon anticipated closing in Q4. The merger is backed by New Mountain Capital, Marlin Equity Partners, Blackstone, and Morgan Health, with New Mountain Health to be majority owner. FierceHealthcare, Healthcare Dive, Virgin release

MidiHealth backed by GV (Google Ventures) in $25 million Series A. MidiHealth focuses on female menopause and midlife transitional care in a direct-to-consumer model. Investors Frederique Dame and Cathy Friedman from GV are joined by current investors Felicis, Semper Virens, Icon, 25M, and Operator Collective, for funding to date of $40 million. The menopause/women’s health segment is one of the few bright spots of the current wobbly healthcare funding scene. MidiHealth recently inked a deal with fertility benefits company Progyny to widen their scope to midlife care for US employers.  Release, FierceHealthcare

And it’s a $30 million Series B for Inbound Health. Based in Minneapolis, the company assists hospitals and health systems to offer acute and post-acute/skilled nursing facility-level care in the home. Funding was led by HealthQuest Capital with participation from existing investors Flare Capital Partners and McKesson Ventures for total funding to date of $40.25 million. The new funding will assist expansion into new markets including further development of the company’s clinical programs, the next evolution of its proprietary technology and advanced analytics platform, and the continued build-out of customized operating assets focused on supply chain, labor, and logistics. Hospital-to-home is another one of the few bright spots this year.  Release, Axios