Rounding up last of 2024’s M&A/fundings: Redesign Health’s $175M, HEALWELL AI buys Orion Health, startup Tuva Health’s $5M

The largest of the year-end fundings (so far) goes to Redesign Health. Best described as a designer and funder of startup health companies which are then spun off, Redesign gained a $175 million investment for a new fund from Declaration Partners, Euclidean Capital, and True North Advisors. Unlike your typical seed funder or incubator, Redesign takes an activist role in forming startups before spinning them off. Its model includes in-house experts to advise on formation, connecting the startup to existing relationships with healthcare organizations and demand generation systems, and access to networks of investors and talent experts. Redesign has used this model with more than 60 companies. These companies have had over 15 million patients and generated >$1 billion of revenue. The fresh funding will be used to start up new companies in eight areas, including ‘preparing for an aging population’. Release, MedCityNews 

Once spun off, the organizations are on their own. Some have been acquired: Jabra Enhance in hearing aids (GN Hearing) and Vault Workforce Screening (Sterling). One notably got into trouble–Calibrate, which was sold for $20 million in an October 2023 ‘reorganization’ to private equity firm Madryn Asset Management along with other investors [TTA 26 Oct 2023]. A pioneer in DTC telehealth programs for GLP-1 weight loss drugs, Calibrate was caught in the squeeze between scarcity of those drugs (Ozempic, Wegovy) and the entry of Teladoc, unable to fulfill its programs nor, at that time, to get insurance reimbursement. It is now benefiting from being in a very hot sector of weight loss drugs. Prior to the sale, Calibrate raised about $160 million in funding [TTA 15 Feb]. Interestingly, Calibrate is still listed in the Redesign portfolio including career openings.

Redesign itself had some rocky times earlier this year with their layoff of 77 from their New York-based staff of 200 to 250 (estimated). The cuts were from the areas that support new venture creation. The new funding is the first sign that Redesign is getting back into the business of forming new companies versus maintaining the portfolio.

New Zealand’s Orion Health to be acquired by Canada’s HEALWELL AI. The final price is NZ$200 million/CA$165 million (US$115 million) for 100% of Orion’s private shares. CA$86 million will be paid in cash and the balance will be paid in HEALWELL stock plus CA$20.5 million in a 3-year performance-based arrangement. Closing is anticipated to be April 2025, after Orion divests itself of non-strategic assets and the usual approvals by shareholders, regulators, and the Toronto Stock Exchange.

Orion Health’s products–Orchestral, Amadeus, and Virtuoso–are data exchange, patient record, and analytics platforms to benefit clinicians and patients. Their largest customers are in Canada, Australia, and New Zealand, plus the NHS in the UK, giving HEALWELL AI an international footprint. HEALWELL AI is based in Toronto and is an artificial intelligence company focused on preventative care through the early identification and detection of disease. Their release announcing the transaction is interesting because of the complexity of the funding (dare we say leveraged?). HEALWELL has $47.6 million in funding over six rounds (Crunchbase). It trades in the vicinity of CA$ 2.00 which gives it a valuation of CA$354 million. Mobihealthnews

Orion Health was last mentioned here with their win two years ago of Saudi Arabia’s health information exchange. The founder, Ian McCrae for the past 30 years, stepped down in August 2022 for health reasons. Replacing him was Brad Porter, his son-in-law. 

On the other end of the spectrum, Tuva Health emerges from stealth with $5 million. The round was led by Virtue, with participation from Box Group and Y Combinator, and notable health tech angel investors. New York-based Tuva has an open-source data model for healthcare analytics and data management to be used by healthcare providers, payers, life sciences companies, and research institutions as an open standard for healthcare data transformation. Their software gives users the ability to transform claims and EHR datasets into analytics-ready data tables via an open-source data model with built-in normalization, data quality testing, and enrichment. 1,500 experts are currently working in collaboration on the model. Their initial partnerships are with Oscar Health and CareAbout Health.  The principals and founders, Aaron Neiderhiser and Coco Zuloaga, are former senior executives from Health Catalyst and Strive Health. Release, FierceHealthcare

Short takes: Orion digital pain therapeutic to be commercialized by Newel Health; Verma to head Oracle Health; CVS to shut 25 LA-area MinuteClinics

Orion Health licenses its chronic pain therapeutic to Newel Health. Orion’s ODD-533 (Rohkea), classified by FDA and the EU MDR as software as a medical device (MDSW or SaMD) will be developed, manufactured, and commercialized by Newel. Newel, located in Salerno, Italy, designs and commercializes digital medicine and digital therapeutics (DTx) for the US and EU such as Soturi, a digital therapeutic app for Parkinson’s Disease [TTA 23 Feb 23], Orion, located in Espoo, Finland, develops primarily human and animal pharmaceutical products. Orion release

Oracle wastes no time in finding a new Oracle Health head, Seema Verma. Conveniently in-house, the former head of the Center for Medicare and Medicaid Services (CMS) from April 2017 to January 2021 joined Oracle in April last year as senior VP in charge of life sciences.  As executive VP, she will oversee both Oracle Health and life sciences as general manager. Verma’s appointment was announced internally in December, according to Bloomberg. In January, Oracle Health’s general manager, Travis Dalton, announced his departure effective 1 March to join MultiPlan as CEO and president. Verma’s government experience will come in handy, as she has the difficult situation of the stalled Millenium EHR at the VA as well as finalizing the Military Health System rollout, ensuring interoperability–as well as growing the faltering hospital EHR business. By combining the positions, Oracle also eliminates one large C-suite salary. Becker’s

And confirming signs of softness in the clinic business [TTA 24 Jan, JPM’s new reality], CVS announced the closure of 25 MinuteClinics in the Los Angeles area. Closing date is 25 February. They will retain 11 MinuteClinic locations in the Los Angeles area, including an on-demand virtual care practice. Clinics are losing out to virtual care and for more immediate needs, urgent care. This follows Walgreens’ closure of a planned 60 VillageMD adjacent practice locations and softness in their CityMD clinic group. List of 25 closures (LA Times), Becker’s

Mid-week roundup: UnitedHealth-Change trial kicks off; Amazon’s One Medical buy questioned; Cionic’s neural sleeve designed by Yves Behar; Medable-Withings partner; Orion Health’s new CEO; IBM Watson Health’s Simon Hawken passes

The Department of Justice lawsuit to block the $13 billion acquisition of Change Healthcare by UnitedHealth Group started on Monday. It is a bench trial in US District Court in the District of Columbia that will last 12 days, concluding on 16 August with a verdict date to be determined. The DOJ and the plaintiffs, including Minnesota and New York State, are presenting their case over seven days. UHG and Change will have five days. It’s expected that UHG CEO Andrew Witty and former chief David Wichmann will be testifying. The American Hospital Association (AHA) was a key player in pushing for a DOJ action (their article here). TTA recapped the main competitive issues in play on 23 March, along with this Editor’s opinion that the merger will be blocked given this current administration’s anti-trust stand. ‘It will be one for the books–the ones marked ‘Nice Try, But No Dice’. FierceHealthcare, HealthcareFinanceNews

Will Amazon’s acquisition of One Medical be reviewed by the Federal Trade Commission (FTC)? That is what Senator Josh Hawley (R-Missouri) is requesting. He cites that Amazon will have “access to enormous tranches of patient data. While HIPAA and other privacy laws exist to thwart the worst potential abuses, loopholes exist in every legal framework.” He also cites, somewhat broadly, that information of this type could be used to suggest over-the-counter blood pressure medications to a One Medical patient shopping at a Whole Foods Market. (What is meant here is that there are many supplements that claim to benefit blood pressure available OTC, such as Garlique; however, there are many OTC meds that can increase blood pressure such as decongestants.) This Editor agrees with Senator Hawley that the acquisition should be carefully reviewed by FTC and, to go further, HHS as it involves patient data.) Hawley Senate.gov page 

The Cionic Neural Sleeve, designed to aid people with mobility issues, is getting a design upgrade via Yves Behar and his fuseproject. The Neural Sleeve [TTA 30 June] aids the legs through sensors in the sleeve that monitor movement for muscle firing and limb position, then analyzes them through an app to optimize functional electronic stimulation (FES) delivered through the sleeve. The Behar team, according to the release, has delivered a neural sleeve “designed for everyday wear, and importantly, is easy to put on and take off – a critical design element for those with inhibited mobility. The lightweight, breathable fabric feels like an athletic legging, and is available in multiple colors and sizes. Paired with the intuitive CIONIC app, the sleeve enables the user to be in control of their own mobility journey.” Cionic is taking pre-orders for delivery in early 2023. Also The Robot Report.

Medable partners with Withings for clinical trials. Medable, a clinical trials platform, is partnering with Withings Health Solutions to connect Withings devices for monitoring at home. Withings devices will provide medical-grade measurements, including temperature, heart rate, blood pressure, sleep patterns, and weight to connect the data into Medable’s decentralized clinical trial platform. Direct monitoring also assists in attracting and retaining subjects in clinical trials, plus improving accuracy, by eliminating subject manual reporting and checkins. Financial terms and duration were not disclosed. Release, FDA News, FierceBiotech

Short international take: Orion Health, an Auckland, New Zealand-based health IT company headed by Ian McCrae for the past 30 years, announced he is stepping down for health reasons. Replacing him in late August as CEO will be Brad Porter, coming from Fisher & Paykel, a NZ-based medical device company. Mr. Porter is Mr. McCrae’s son in law.  Orion recently won what could be the largest health information exchange system in the world for Saudi Arabia, covering 32 million people. Healthcare IT News 

And a sad passing: Our UK and European Readers likely know Simon Hawken from his long career with IBM, including Watson Health (now Merative) and Merge Healthcare, and earlier with BEA Systems. HISTalk reported that he passed away on 25 July. This Editor has not been able to find other notices, so is asking for Reader help and comments.

Qualcomm (Second) Life: a conversation with Jim Mault

One of the surprises for this Editor, and for others attending the mHealth Summit, was to see the sizable presence of Qualcomm Life on both the exposition floor and during the sessions. From a near-nil presence at ATA 2014 and gone dark on news, the floodlights snapped on last week with new partners and a new emphasis: coordination of chronic and transitional (hospital to home) care management (CCM/TCM).

On the show floor, the spotlight was on the partner companies which mixed the established with (mostly) the early and mid-stage. Readers will recognize names such as AliveCor, Telcare, OMRON, Nonin and Airstrip; not so well known are Vaica, Orion Health, Monitored Therapeutics, IMPak Health, Vital Connect, Care Connectors, toSense (CoVa), Dexcom, InteliChart, TruClinic, ForaCare, VOXX, vitaphone (outside of Europe), Propeller Health and Noom Health (a NYeC Digital Health Accelerator 2014 graduate). The partners occupy different parts of the management continuum, integrating communications, record sharing, population health management, sensor-based monitoring, traditional and non-traditional vital signs monitoring, medication management, behavioral change methodologies and PHRs. The 2net Hub is still present for data transmission, sharing and storage, but more prominent is Qualcomm Life’s HealthyCircles platform which provides the clinical management ‘glue’: secure communications, record sharing and care team coordination. HealthyCircles was purchased in mid-2013. Founder James Mault, MD, FACS joined Qualcomm Life as VP/Chief Medical Officer.

We had some post-mHealth Summit reflection time by telephone this Wednesday while Dr Mault was in Boston. (more…)