Comings and goings: Cuts hit Athenahealth, IBM Watson’s Drug Discovery unit; Bain may sell Waystar RCM

Athenahealth has announced they are trimming 4 percent of their total workforce. With a large 900-person campus in Belfast, Maine that once belonged to MBNA credit cards, and a workforce of about 5,000 headquartered in Watertown, Massachusetts, there is considerable local concern in an area of Maine that offers few well-paying jobs. Reportedly dozens of jobs there will be lost. This caps a tumultuous period with the company. Athenahealth was acquired last November by Veritas Capital and Evergreen Coast Capital, then merged with a GE Healthcare spinoff they owned, Virence Health, in value-based care, under the Athenahealth name. Bangor Daily News

IBM Watson’s Drug Discovery product, which was targeted to pharmaceutical companies, is being cut back to work with only current partners and with clinical trials due to poor sales. According to The Register, a tart-tongued UK tech website which actually reached an IBM spokesperson, IBM’s Ed Barbini stated that “We are not discontinuing our Watson for Drug Discovery offering, and we remain committed to its continued success for our clients currently using the technology.” Also Seeking Alpha. IBM Watson and Watson Health, like Athenahealth, are moving through a rocky period of closing initiatives (Watson Workplace), layoffs, executive departures (head Deborah DeSanzo last November), bad publicity, and clients like MD Anderson who don’t part quietly. [TTA 8 Nov 18].

Another merged health infotech company may have a new owner soon. Waystar, which was formed by the acquisition of ZirMed and Navicure in 2017 and manages revenue cycles for 450,000 practices, is rumored to be up for sale by owner Bain Capital. Interested parties include Visa and OracleBloomberg

The Theranos Story, ch. 27: investor ‘whales’ surface in class action lawsuit news

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]Don’t jump…you may land on one of them! In the Bottomless Well that is The Unicorn Losing Its Horn, The Transubstantiation of a $9 bn valuation to $9, to mix up a Whole Lotta Metaphors, the latest is that Certain Big Investors (‘whales’ in Vegas Lingo) and at least one minnow have lost their shirts, or maybe their sleeves and cuff links.

The first is via a class action lawsuit filed Monday against Theranos in San Francisco Federal Court by Hagens Berman Sobol Shapiro LLP, seeking to represent potentially hundreds of purchasers of Theranos shares from July 29, 2013, through October 5, 2016 .

According to the Wall Street Journal, the charges relate to “false and misleading claims about its operations and technology while soliciting money from investors.” Hagens Berman is representing Silicon Valley investment banker Robert Colman, who is the retired co-founder of Robertson Stephens & Co. (a legendary, now defunct, investment bank specializing in tech that blew up after the dot-com bust). He invested through a VC fund, Lucas Venture Group, who participated in Theranos’ Series G funding in late 2013. Lucas was invited to invest $15 million, and their principals had personal ties to Elizabeth Holmes, according to TechCrunch. The second plaintiff, Hilary Taubman-Dye, purchased Theranos shares at $19/share on SharesPost Inc., an online exchange for shares of private companies, in August 2015. Her claim is that she tried to cancel it after the Wall Street Journal exposé in October, but the purchase went through in December after Theranos, Elizabeth Holmes and an unidentified third party refused to buy back the shares as a secondary transaction. TechCrunch identified her as a “longtime technical recruiter who now works in investor relations for a TV production company” which means that her investment was likely no bag of shells for her. Their respective investments are not disclosed.

The second, according to a second article in the Journal, comes from the usual ‘sources familiar with the matter’ and papers filed by Theranos in Delaware and Arizona. These include some very atypical startup investors, such as Rupert Murdoch of News Corp. and family-controlled Cox Enterprises, at $100 million each in the 2014-15 round when shares were valued at $17/each, and an undisclosed amount by Riley Bechtel of Bechtel Group, who was later named to the board of directors. Other, more typical Silicon Valley investments date back to when Theranos was the more pedestrianly named Real Time Cures in 2004 and the shares were 15 cents each:

  • Oracle co-founder Larry Ellison
  • VCs from firms such as ATA Ventures and Draper Fisher Jurvetson. The latter’s Tim Draper and his daughter (!) have been quite critical of anyone, especially John Carreyrou of the WSJ, claiming that Ms Holmes was perhaps mistaken in her scientific and business practices. (Partner Jurvetson in reports has expressed a more ‘que será, será’ attitude.) (more…)