News roundup: Waystar’s $8B IPO plan takes delay, Perficient to buy SMEDIX, PicnicHealth buys AllStripes, MDLIVE buys Bright.md, Sage garners $15M, Cureatr shuts suddenly, Calibrate reorganizes, BetterUp lays off 16% (updated)

October 26, 2023 | by
  • It’s a Tale of Two Cities…the best and worst of times, depending on what company you’re with.

Waystar files for the first IPO of 2023 in healthcare. Revenue cycle management (RCM) and payments software company Waystar filed a registration statement with the Securities and Exchange Commission (SEC) last week, after filing a draft with the SEC in August. Waystar, formed from RCMs ZirMed and Navicure, isn’t profitable (2023 first half net losses of $21 million on $387 million revenue) but it is big–30,000 provider organization customers in a subscription model generating $4 billion in healthcare payment transactions last year. The offering on Nasdaq under WAY potentially values the company at $8 billion.

The IPO offering is being led by JPMorgan Securities LLC, Goldman Sachs, and Barclays Capital. Swedish global investment firm EQT Partners and the Canadian Pension Plan Investment Board became majority investors in 2019 with Bain Capital retaining a share. Waystar also acquired that year Connance, Ovation Revenue Cycle Services’ transaction services tech, PARO and Digitize.AI.

A comparative factor is that its main competitor, R1 RCM, is public.

It’s been over a year since the last digital health company went public, but any speculation that this is a dambreaker for health tech IPOs would be premature, even in the ever-optimistic view of Rock Health. FierceHealthcare, Waystar release

Update: The WSJ reports that the Waystar roadshow to pitch the IPO to investors, scheduled for this week, has been delayed to December at earliest, pushing the IPO into 2024. Sometime. IPOs for other companies have gone south. Reuters

What is more typical are these three acquisitions and consolidations, mainly in the healthcare software and data collection areas, as time goes on and fresh funding rounds grow scarce.

Perficient, a ‘digital consultancy’, is in agreement to buy SMEDIX, a $12 million in revenue healthcare software engineering firm headquartered in San Diego, California, with offshore operations located in Cluj-Napoca, Romania. Acquisition cost was not disclosed. Closing is anticipated in January 2024. SMEDIX President and CEO Fayez Sweiss will join Perficient in a key leadership role and the release mentions the addition of 175 skilled global professionals.

Patient community, clinical data, and patient-reported evidence collector PicnicHealth is acquiring AllStripes, a platform for rare disease data and patient access. PicnicHealth’s partnerships are primarily with pharmaceutical companies and nonprofit research organizations for patient data. AllStripes generates research-ready evidence to accelerate rare disease research and drug development, as well as a patient/family-facing app connecting them to treatment research. AllStripes had a $50 million Series B funding round in 2021 and PicnicHealth had a $60 million Series C round in 2022 backed by new investor B Capital Group plus existing investors Felicis Ventures and Amplify Partners. But as is usual of late, the acquisition cost is not disclosed. Release

In TelehealthLand, MDLIVE is buying Bright.md. Announced at HLTH, MDLIVE, part of Cigna unit Evernorth, will add Bright.md’s asynchronous telehealth capabilities to its existing platform. The expansion will target their virtual urgent care area, adding chronic disease management and wellness visits in 2024. Asynchronous telehealth adds an information gathering and triage option to standard virtual consults in gathering initial information, optimally directing the patient to the right care at the right time. Acquisition costs (again) were not disclosed. MDLIVE also announced a care coaching option within its virtual primary care program. MDLIVE works with employers and health plans which gives them in total a 43 million member base. Healthcare Dive, FierceHealthcare

Sage scored a $15 million Series A. Funding for their senior housing care platform was led by Maveron with participation from Distributed Ventures, ANIMO Ventures, and Goldcrest Capital. The platform consolidates and coordinates nurse call and care information for residents. This follows on their August 2022 $9 million in seed funding.  Mobihealthnews

Also typical of late are closings, reorganizations, and layoffs.

NYC-based Cureatr shut down suddenly Tuesday 17 October. According to the sketchy reports on places like Reddit, it was with three days notice to staff nor severance and done on a Zoom call. Systems were shut down on Friday but not the website which is still up. Cureatr was a comprehensive medication management company with staff pharmacists working with topline providers like New York Presbyterian, Northwell, Penn Medicine, and DaVita. Surprisingly, they bought a competitor, SinfoniaRx, only last March. Posters on Reddit describe new hires starting in the last two months and people yet to start who had already left their jobs. From Glassdoor, posters state that the company went bankrupt after not getting more financing. Things went south fast. What is going on now is a bad rerun of the 2007-8 period when funding dried up and companies ran out of runway fast, a period that this Editor experienced firsthand at Living Independently Group. Shotgun takeovers and sudden closings. Thanks to HISTalk 23 Oct for the heads up.

Another NYC former high-flyer, ‘metabolic health’ weight loss digital health coach Calibrate, was sold in a ‘reorganization’ to private equity firm Madryn Asset Management along with other investors. Prior to the sale, Calibrate raised about $160 million in funding. With scarcity of their GLP-1  drug therapies Ozempic and Wegovy and insurers refusing coverage of their over $1,700 direct-to-consumer regimen (not including medication cost), plus new competitors like Teladoc, Calibrate lost patients, received rafts of angry social media postings, refunded millions to them, and laid off 150 staff in July 2022 with 100 departing last April. Weight loss/obesity management remains hot, but in more payer and employer-centered models, to which Calibrate announced it was pivoting to this summer. MedCityNews

Calibrate was one of the companies out of Redesign Health, which has developed about 50 health tech companies, the latest being Harmonic Health for care management of dementia patients and family support. 

Telemental health is also going wobbly, with BetterUp recently laying off 16% of its workforce or 100 employees. BetterUp provides virtual behavioral change coaching for corporate performance, including mental health. Their base is primarily enterprise clients with a B2C offering. The brief report in the Daily Beast states that the company has missed financial targets starting with last year and “grappled with internal tumult for many months, including a rebellion by its army of coaches last spring.” Back in the palmy days of 2021, BetterUp raised $300 million through a Series E in a total of seven funding rounds and achieved a $4.7 billion valuation, which is not likely to be the same now.

Yes, this is the company that employs Prince Harry, Duke of Sussex as its chief impact officer. No one quite knows what he does, how much time he spends on company business, nor what he is paid–which are issues with the employees, especially those facing or contemplating The Ax. The prince has made some corporate appearances at conferences. The CEO characterizes his duties as expanding “global community reach”. Perhaps this Editor is cynical, but Prince Harry a/k/a ‘This One’ is beginning to resemble one of his ancestors, Edward, the Duke of Windsor, without the splendid sartorial style.  The Mercury News manages to spin a whole article about this and Netflix. Certainly, a lesson to be learned about celebrity employees.

Short takes for Thursday: Diagnostic Robotics $45M raise; Sage’s $9M seed; VA names EHR ‘functional champion’; Aussie telehealth startup Coviu arrives in US

August 4, 2022 | by

Tel Aviv-based Diagnostic Robotics gained a $45 million Series B. The company has developed AI predictive analytics for health plans, providers, government, and employers for clinical assessment and decision support. The Series B was led by StageOne investors, with participation from Mayo Clinic, thus becoming a Mayo Clinic Platform portfolio company, plus Technion – Israel Institute of Technology, as well as other existing investors. Total funding since 2019 is $69 million (Crunchbase) Release, Mobihealthnews

NYC-based Sage received $9 million in seed funding to further develop and market its app that rethinks the nurse call system in use in senior living. The platform provides caregivers with data to coordinate incident responses and triage quickly and effectively, plus provide care managers with tools to better understand resident needs, provide proactive care, and view staff performance. The round was led by Goldcrest Capital, with existing investors ANIMO Ventures, Distributed Ventures, and Merus Capital. Release

VA names ‘functional champion’ for their VistA to Oracle Cerner transition. Dr. David Massaro will work as the clinical executive representing the Veterans Health Administration (VHA). He will lead functional initiatives to support the department’s medical personnel during the transition. Dr. Massaro is a long-time VA-er, previously acting chief health informatics officer for the Office of Community Care and before then director of integrated health practice within the Office of Health Informatics, as well as a practicing physician who joined VA in 2006. FedScoop

Coviu, an Australian telehealth startup, is launching its platform in the jammed US market. It’s marketing as an ‘all-in-one virtual engagement platform’ and is clearly appealing to primary care practices that need a less expensive solution. Its difference is apparently with modular apps that can extend a provider’s clinical work: behavioral health, speech pathology, and audiology. Base pricing starts at $25 monthly with the highest level package $65/month. Integrated apps are the Wechsler Individual Achievement Test, pulse oximeter remote monitoring, and a checklist for PTSD. They are also developing a new digital wound care toolkit in collaboration with the Commonwealth Scientific and Industrial Research Organisation and the Western NSW Primary Health Network, for release in 2026 (!!). Coviu claims use by 90,000 clinicians worldwide who deliver a daily average of over 14,000 telehealth consultations. Their US base is in Dover, Delaware and is HQd in Brisbane and Sydney. Release, Mobihealthnews

‘F for Fake’ in peer-reviewed journals

January 15, 2014 | by

F for Fake was the film master Orson Welles’ last released film; it was a small documentary on the art forger Elmer de Hory, with a side serving of Clifford Irving (the author of the fake Howard Hughes autobiography), and explored the nature of authorship and authenticity. We now have a burgeoning ‘F for Fake’ scandal in peer-reviewed open-access scientific journals which can’t–or won’t –detect bogus research. A Science Magazine (American Association for the Advancement of Science–AAAS) journalist, John Bohannon, drafted a ‘spoof’ paper which was submitted to 304 peer-reviewed, open-access journals. It detailed the anticancer qualities of a chemical derived from lichen. Despite the complete fabrication of the discovery, the researcher and his university  (more…)