News roundup: with chronic conditions peaking, Twin Health’s metabolic AI gains $50M, Talkspace and Evernow partner for women’s mental health

December 15, 2023 | by

Chronic conditions on the rise, according to United Health Foundation. The non-profit philanthropic arm of UnitedHealth Group released its annual America’s Health Rankings 2023 report. The report considers 87 measures from 28 distinct data sources for 2022. Topline results in their summary are concerning. 

  • Eight chronic conditions reached their highest level in AHR’s tracking history: arthritis, depression, diabetes, asthma, cancer, cardiovascular diseases (CVDs), chronic obstructive pulmonary disease (COPD),  and chronic kidney disease (CKD).
  • 29.3 million adults, or 11.2% of the population, reported having three or more chronic conditions.
  • During 2021 and 2022, depression rates grew to 21.7% or 54.2 million people. Diabetes incidence rose to 11.5% or 31.9 million adults.
  • Disparities are pronounced between demographic groups. From the overview:
    • Hispanic adults were 2.1 times and black adults were 1.8 times more likely, respectively, to have uncontrolled A1C compared to multiracial adults.
    • In 2013-2016, asthma-related emergency room visits were 2.5 times higher among black compared with white adults with asthma.
    • White adults with hypertension were 1.5 times more likely to have their blood pressure “controlled” compared to black adults with hypertension.
  • Premature death increased 9% between 2020 and 2021: drug deaths increased 15%, firearm deaths 7%, and homicide increased 33%.

The report also ranked the healthiest states as New Hampshire, Massachusetts, Vermont, Connecticut, and Minnesota. Bottom-ranked: Louisiana, Mississippi, Arkansas, Oklahoma, and Alabama. The annual report includes sub-reports focusing on the health of women and children, mental and behavioral health, seniors, and Covid-19. FierceHealthcare

Twin Health’s AI approach to Type 2 diabetes as a metabolic disease gains a $50 million Series D. This late-year raise in a difficult funding market was led by Temasek with participation from existing investors ICONIQ Growth, Sofina, Peak XV, and Helena, adding to their October 2021 $140 million Series C. Twin Health’s main platform is the Whole Body Digital Twin which models an individual’s metabolism from data points collected daily via wearable sensors, clinical lab parameters, and self-reported preferences. The concept of a ‘digital twin’ to guide both the patient and the care team is a relatively new one, created on an app available to both the patient and their Twin Health licensed clinical care team. Their method is to provide individualized guidance on nutrition, sleep, stress, and activities to heal the metabolism and root causes of diabetes, intending to reverse Type 2 diabetes metrics and medication use within six months. Financially, they also have an attractive model–full risk with employers and health plans, being paid when their employees and members get results. According to their founder and CEO Jahangir Mohammed to Axios, “Twin is currently conducting two randomized controlled trials — one in India and one in the U.S. — analyzing whether people using its approach can successfully enter diabetes remission or “reversal.”  Mobihealthnews, Twin Health release

Addressing both mental and women’s health is an interesting partnership between Talkspace and Evernow. Evernow, which focuses on telemedicine treatment for women 40+ during perimenopause and menopause, is partnering with Talkspace to address mental health issues that are prevalent at that time. Evernorth’s survey using their records of over 100,000 patients found that 61.4% of women surveyed reported feeling symptoms of anxiety and/or depression.

  • Evernow members in multi-month plans will gain free access to Talkspace’s mental health resources in their self-guided program that has 400 self-guided therapy sessions plus on-demand workshops and classes. Virtual therapy offered by Talkspace has a $100 discount.
  • Talkspace members also have discounted access to Evernow programs, with a three-month plan for $129 or a 12-month plan for $348.
  • They are also bundling their programs together for enterprises and employers.

Evernow is also moving into AI capabilities through the Early Access Partnership with Hippocratic AI, a generative AI company developing safety-focused large language models for healthcare. Talkspace recently won a $26 million three-year contract with New York City’s Department of Health and Mental Hygiene for NYC Teenspace, a free therapy program for those aged 13 to 17. Release, Mobihealthnews, MedCityNews

Close of week short takes: Q2 earnings up for GEHC, Talkspace; UnitedHealth invests $11M in SDOH; fundings for two AI startups, K4Connect, UpLift, Family First

July 28, 2023 | by

Winding up this week on nothing but positive news.

GE Healthcare was up smartly on revenue. For Q2, GEHC reported revenue of $4.8 billion, up 7% versus Q2 prior year, and a 9% organic revenue growth.  The adjusted earnings before interest and taxes (EBITDA) was $711 million versus $719 million prior year, with net income slightly down at $418 million versus $485 million prior year. Adjusted earnings per share was $0.92. Orders were up 6%. GEHC is adjusting its earnings upward by one percentage point for the full-year guidance on organic revenue growth and 10 cents in adjusted EPS at the midpoint. GEHC spun off from GE in January. Mobihealthnews

Talkspace had a far more mixed picture. Their Q2 revenue climbed 19% versus prior year to $35.6 million. This was due to an 82% increase in B2B revenue partially offset by a 41% consumer revenue decline. The other good news was that they narrowed net loss to $4.7 million from the prior year’s $23 million. Adjusted for EBITDA, the loss was $4 million. Another positive factor was that operating expenses were reduced 32% to $24.2 million. They are seeing an increase in revenue for 2023 to $137 million to $142 million and moving towards breakeven by end of Q1 2024. Another entrant in the crowded telemental health space, Talkspace went public in 2021 through a SPAC, trading as high as $11.95. Late last year, it flirted with delisting on Nasdaq, but is currently trading at $1.70. Mobihealthnews

UnitedHealthcare’s big bet on social determinants of health (SDOH) involves $11.1 million in grants to 66 nonprofits across 12 states. Part of their Empowering Health initiative, the grants help organizations that aid uninsured individuals and underserved communities in areas such as food insecurity, nutrition, social isolation, memory loss, behavioral health issues, health literacy efforts, and more. Since its start in 2018, UnitedHealthcare invested $62 million in grants that serve more than 11 million people in 30 states and the District of Columbia. MedCityNews, UnitedHealthcare news

Digital health and AI fundings are also ramping up–a little–in the $9-15 million range:

  • Two generative AI startups, Hippocratic AI and GenHealth AI, had early funding rounds in the $15 million range. Hippocratic AI is a safety-focused large language model (LLM) for healthcare competing with GPT-4, outperforming it on 105 of 114 healthcare exams and certifications. Their second seed round funding of $15 million from Cincinnati Children’s and HonorHealth adds to their May $50 million seed. GenHealth AI raised $13 million in a venture round from Obvious Ventures and Craft Venture. Their form of generative AI they call a large medical model (LMM) trained on medical-event data called DOOG-E. Two Washington veterans joined their board: Dr. Don Rucker, former national coordinator for health IT in the Trump administration and currently on the 1upHealth board, and Aneesh Chopra, the first chief technology officer of the US in the Obama administration.
  • Senior housing focused K4Connect received a venture round of $9 million from AXA Venture Partners and Bryce Catalyst with existing investors Forté Ventures, Intel Capital, the Ziegler-LinkAge Fund, and Topmark Partners, for a total of $41 million. K4Connect is positioned as an operating system (FusionOS) that integrates multiple senior living technologies. Mobihealthnews
  • Telementalhealth provider UpLift raised $10.7 million in Series A funding from Ballast Point Ventures with participation from Front Porch Ventures, Kapor Capital, and existing investor B Capital for a total raise of $22 million. UpLift is a direct to consumer therapy model which promotes both insurance coverage, affordable rates, and medication management. Another Series A funding of $11 million went to Family First, a technology platform for enterprises that supports caregivers’ mental health and wellbeing, The round was led by RPM Ventures and Eos Venture Partners.  Mobihealthnews

Mid-week roundup: CVS-Oak Street closes, DEA extends controlled substance telehealth waiver, Bright Health selling CA MA plans, Talkspace, Teladoc turnarounds? (updated)

May 4, 2023 | by

CVS closed its $10.6 billion deal for Oak Street Health, well before the anticipated end of 2023. It picks up 169 primary care offices in 21 states–and an unprofitable operation that clocked a loss last year of $510 million without much of a change till 2025. The quick closing was likely spurred by both the Department of Justice (DOJ) and the Federal Trade Commission (FTC) letting their antitrust challenge period expire at the end of March with nary a whimper. DOJ and FTC, the latter which has been remarkably ‘pixelated’ of late on privacy issues with GoodRx and Teladoc’s BetterHelp, evidently passed on ‘egg on the face’ and let the ovoid land squarely on Elizabeth Warren’s Senate desk. She had asked FTC to ‘carefully scrutinize’ the deal. Shareholders received a tidy $39 per share. OSH will remain a multi-payer practice and now-former CEO Mike Pykosz will lead the company under CVS’ new healthcare delivery arm. This follows on CVS’ closing of Signify Health [TTA 30 March].  CVS release, FierceHealthcare Our prior gimlety coverage of CVS/OSH: 16 Feb, 2 March, Unlike OSH, CVS had a strong Q1 with $2.1 billion in profit, slightly down from 2022’s $2.4 billion, and an 11% boost in revenue. FierceHealthcare

DEA in-person prescribing requirements on Schedule II and higher controlled substances postponed indefinitely. The proposed rule would have added back in-person requirements for telehealth prescribing of controlled substances after the official end of the Public Health Emergency and its in-person waivers on 11 May. On 25 April, the DEA filed a draft temporary rule with the Office of Management and Budget for the extension. The Ryan Haight Online Pharmacy Consumer Protection Act of 2008 requires that Schedule II medications and narcotics (including Adderall and Ritalin) require an in-person prescription, while Schedule III or higher medications, including buprenorphine, Ambien, Valium, Xanax and ketamine can be prescribed for 30 days via telehealth but would require an in-person visit before a refill. The DEA was deluged with 38,000 comments and advocacy pressure from ATA. The change has also thrown a wrench in the works of online mental health companies which prescribe many of these drugs. FierceHealthcare  Updated–The ATA has weighed in favorably about the DEA postponement. Kyle Zebley, executive director of ATA Action, stated in their release that “Our hope is that the DEA will use the time of an extension to be responsive to the concerns of telehealth advocates, patients, and the American people to create rules that ensure access to clinical care that is not inappropriately restricted.”

Bright Health put its California Medicare Advantage plans up for sale. The company, staring down at bankruptcy [TTA 7 Apr, 20 Apr] does not yet have a buyer for the MA plans. When they are sold, it will be Bright’s exit as a health insurer, as it has exited MA plans in Florida and exchange plans everywhere else–in a flurry of state investigations ranging from Tennessee to Texas. Bright plans to focus on its provider arm, NeueHealth. Healthcare Dive

Talkspace narrowed its loss, increased revenue. The telemental health provider narrowed its Q1 net loss to $8.8 million compared to 2022’s $18.3 million in Q4 2022 and $20.4 million in Q1. Revenue increased to $33.3 million versus last year’s Q1 of $30.2 million. Their source of business has shifted to B2B with a 71% increase, a sharp departure from their formerly dominant consumer segment which has declined 40%.  Their 2023 forecast revenue is $130-135 million. It is still facing a Nasdaq delisting as trading below $1.00 per share and a class action lawsuit on subscription renewals. Mobihealthnews

Teladoc also waxed positive, ‘beating the Street’ with Q1 revenue growth of 11% to $629 million. This was powered as expected by BetterHelp, Teladoc’s direct-to-consumer mental health business. Their revenue grew to $279 million, a 21% increase. Teladoc’s enterprise business also had a 5% boost to almost $350 million. Their weight loss business is expected to be another net positive income generator, but not affecting results until 2024 as it won’t be introduced until Q3 [TTA 21 April]. The road to profitability will be a long one, as losses this quarter were $69.2 million, but compared to last year’s $6.7 billion writedown of Livongo, it’s positively smooth. Healthcare Dive

Ad tracker action heats up: Congress questions DTC telehealth companies on sensitive patient health data sent to advertisers

February 9, 2023 | by

It looks like telemental and addiction counseling telehealth sites are routinely sending patient information to media ad platforms–Google, Facebook (Meta), TikTok, Microsoft, Snapchat, Bing, Pinterest, and Twitter–to serve ads back to patients. Four Senators sent letters this week to three telehealth companies treating patients: Monument (alcohol addiction), Workit Health (opioid and alcohol), and Cerebral (ADHD and other mental health). The letters questioned the use of ad trackers (pixels) such as Meta Pixel that collect information from telehealth sites and then use the information to send users targeted ads based on that information. Except that this is not about curtains or shoes, but medical treatment. 

Kicking this off was The Markup/STAT study in December, examining 50 telehealth websites.

  • 49 of 50 websites shared user/patient tracking data to advertising platforms. This captured data as routine as URLs and IPs, and as extensive as name, email, phone, questionnaire answers, when users created accounts, and cart behavior, such as a prescription medication or treatment plan.
  • 35 were found by the study to have trackers sending individually identifying information to at least one media platform that included names, email addresses, and phone numbers
  • 25 had at least one tracker that indicated when users added prescription drugs and other items to their cart or when they checked out with a subscription for a treatment plan
  • 13 had at least one tracker that collected patients’ answers to medical questions

Ad trackers then send that information to platforms, which then serve targeted ads back to the telehealth companies’ users and patients. For the telehealth companies, the data is monetized. Because ads are served, there is a revenue stream back to the telehealth companies. 

From the senators’ letter: “This data is extremely personal, and it can be used to target advertisements for services that may be unnecessary or potentially harmful physically, psychologically, or emotionally.” Markup/STAT

Users may well assume that because the telehealth companies eventually connect them to a provider covered by HIPAA, or sends them a prescription from a provider, such as migraine treatment, that their data is protected along the entire journey. That assumption has now been demonstrated to be incorrect. This included major, heavily advertised DTC providers such as Lemonaid, Keeps, Hims & Hers, Talkspace, and Roman (Ro). Many of them are now examining their pixel policies.

The December article linked above has all 50 companies and what information they found was sent to ad platforms. The only website that did not was Amazon Clinic–brand new and of course not wanting to share their information outside of Amazon.

This follows on the FTC’s still to be approved by a Federal court, but apparently successful $1.5 million action against med discounter GoodRx using the never-used-before Health Breach Notification Rule, enacted in 2009 [TTA 3 Feb]. 

Why this is significant: first, the FTC action using an old rule, followed by the senators targeting three prominent (and in Cerebral’s case, beleaguered) telehealth companies, and the red meat documentation provided by The Markup/STAT study provide grounds for endless follow-up by not only Congress, but also private and public (DOJ) litigation. Stay tuned.

Interesting pickups from JPM on CVS, Talkspace, Veradigm backs Holmusk, ‘misunderstood’ Babylon Health; six takeaways

January 19, 2023 | by

Out of a decidedly soggy JPMorgan healthcare conference that concentrated mainly on pharma and biotech, there was some news in the downtrodden health tech and related areas. Selected from FierceHealthcare’s Heather Landi’s take:

CVS Health’s open checkbook for the right companies in primary care, provider enablement, and home health was a throwback to the palmy days of 2020-21. A big announcement at JPM was their investment in in-home kidney care and end-stage renal disease management provider Monogram Health. Their Series C raise of $375 million was lead-funded by CVS Health, Cigna Ventures, Humana, Memorial Hermann Health System, and SCAN.  Release, Mobihealthnews This added up to a busy January for CVS with leading Carbon Health‘s $100 million series D [TTA 11 Jan] and $25 million for Array Behavioral Care [TTA 12 Jan].

Talkspace, the cracked telemental health SPAC most recently rumored to be in buy talks with Amwell, touted their “defined, very significant path to profitability within a short period of time.” New CEO Jon Cohen, MD, a surgeon and veteran healthcare exec, touted the strength of the telemental health model, the effectiveness of their asynchronous messaging therapy for depression and anxiety,  and their market change from consumer to employers and health plans. Talkspace has some distance to go, quickly, with a loss through Q3 2022 of $61 million on revenues of $89 million and a share price today of $0.74, which means eventual delisting from Nasdaq. Is a quick buy in their future?

Veradigm, still settling in on their new corporate name, has its own bet on behavioral health data on the analytics side, with a lead investment in Holmusk‘s $45 million Series B. Holmusk will pull in de-identified patient data from Veradigm to their NeuroBlu Database.  Release

And on to Babylon Health, where Ali Parsa must feel like Eric Burdon of the 1960s blues group The Animals in the depth of being ‘misunderstood’. Dr. Parsa promises a path to breakeven by end of 2024.  Babylon’s revenue is on target to hit over $1 billion. They operate in over 15 countries with well over 5 million transactions. But their SPAC cracked too from a high of $272 per share after listing in October 2021 to today’s price just above $11, leaving a lot of investors in the lurch. Even though Q3 revenue increased by $288.9 million versus $74.5 million in 2021, an increase of $214.4 million or 3.9x, and the Q3 loss correspondingly widened to $89.9 million, the loss was significantly lower as a percentage of revenue. They are also converting from a foreign private issuer to a domestic, planning a reverse share split, and selling non-core businesses like the Meritage IPA [TTA 22 Nov 22] It’ll either be more correctly understood by Mr. Market or…be bought?

Arundhati Parmar in MedCityNews had a tart take on the proceedings, leading with the convergence of therapeutics with devices and data, Primary Care-Primary Care-Primary Care, billion-dollar bolt-on acquisitions that may be good for biopharma (but not necessarily so in health tech where integration is leading), and innovative therapies that don’t save but actually cost mo’ money. All of which is no surprise to our Readers. And why is there a JPM every year? Healthcare insanity may be catching.

“Big Story” update: where Elizabeth Holmes will spend 11 years, Cerebral sues former CEO Robertson, Amwell buying Talkspace?

November 30, 2022 | by | 1 Comment

Where will Elizabeth Holmes serve her sentence, whatever it is? A story that got lost in the Thanksgiving shuffle was Bloomberg News’ (paywalled) report that Judge Edward Davila recommended that she be remanded to a minimum security Federal women’s prison in Bryan, Texas, outside of Houston. What has previously been mentioned in the press and by legal commentators is that she would likely serve her time in a northern California minimum security prison about an hour from her present home, the Federal Correctional Institution in Dublin, California. According to commentators, the larger Bryan facility may be better than Dublin, which is a satellite camp. Bryan  “…compared to other places in the prison system, this place is heaven. If you have to go it’s a good place to go,” Alan Ellis, a criminal defense lawyer, told Bloomberg. The final say will be made by the Federal Bureau of Prisons. The selection is important because Federal inmates typically serve a minimum of 85% of their time, unlike time served in state prisons. Gizmodo reports on Bloomberg’s reveal

Holmes’ reporting to prison is scheduled for 27 April 2023. Her appeal to the Ninth Circuit Court of Appeals must be filed within two weeks of sentencing, which by this Editor’s calendar is 2 December but may be later due to the holiday. Holmes may be permitted to stay out of custody pending appeal if it extends beyond the surrender date if the judge permits. 

Editor’s commentary: One wonders whether Holmes’ appeal will be successful. One factor is what Judge Davila acknowledged: “What is the pathology of fraud? Is it the inability to accept responsibility?” Even in her personal statement during the sentencing, there is evasion. Holmes did admit some sorrow about patients and investors relating to her own failings (back to her again), but sorrow is not responsibility. Moreover, Holmes did not refer to making amends for that sorrow created by the Fraud That Was Theranos. Her defense continues to blame others, like Sunny Balwani, former president and live-in. Even the 130 character letters, many from others who knew her only briefly, blamed others including Balwani, almost tracking to the defense’s talking points. The case proved conspiracy with Balwani, who will likely be sentenced on 7 December for what is expected to be something close to the full 20 years as convicted on all 12 counts.

The tables are turned by Cerebral on co-founder/former CEO Kyle Robertson. Only a week or so ago, Robertson (through his attorneys) reportedly sent a letter to Cerebral management demanding access to documents detailing “possible breaches of fiduciary duty, mismanagement and other violations of law.” [TTA 18 Nov] Now Cerebral is suing Robertson for his default on a $49.8 million loan taken this past January to buy 1.06 million shares of common stock in the company. According to the filing in New York Supreme Court, he is personally liable for $25.4 million, plus interest and attorney’s fees. After his dismissal 18 May, he had six months to repay the loan or direct Cerebral to repurchase or cancel the shares. According to the lawsuit, “Robertson repeatedly asserted that he would not repay the loan.” The troubled company laid off 400 or more in October and is now valued at a fraction of last year’s $4.8 billion valuation.  Stay tuned. HealthcareDive, Mobihealthnews

A cracked SPAC may get itself sold. Talkspace, which has had a year of challenges since its SPAC, apparently is in talks to be acquired by Amwell. According to Calcalist, an Israeli business publication, Amwell is in advanced talks to acquire it for $1.50 per share, or about $200 million. This is quite a comedown from when Talkspace was valued in January 2021 at $1.4 billion. It executed its SPAC in June [TTA 25 June 2021] and hit Nasdaq at $8.90 per share. Today it closed at $0.88, so Amwell’s offer would be close to double. It would also remove another problem. Nasdaq notified Talkspace on 18 November that they were on the verge of delisting their stock, as it was trading for over 30 consecutive business days at under $1.00 per share.

The ‘advanced’ term is interesting because this past June, reports indicated that Talkspace rejected overtures by Amwell and Mindpath. The amount bandied about at that time was $500 million and a sale was expected during the summer. (What a difference six months of economic uncertainty makes.) 

In November 2021, founders Roni and Oren Frank stepped down and their COO resigned shortly thereafter on a conduct-related allegation. Shareholders started to sue starting then. YTD results have also been dismal, with losses of $61 million on revenues of $89 million.

Talkspace would bolster Amwell’s mental health capabilities in telepsychiatry with a DTC and enterprise product. If the company hung on to most of their $184 million in cash reported in June (of the SPAC’s $250 million), for Amwell it also would be a deal that almost pays for itself. HealthcareDive, FierceHealthcare

Weekend reading roundup: Amwell’s Schoenberg opines to Politico; Teladoc’s new CMO also opines, SPACs are done, done, done

July 15, 2022 | by

If Teladoc’s Jason Gorevic [TTA 1 July] and new CMO Vidya Raman-Tangella (below) are suddenly available to the health press, can a Schoenberg brother be far behind? This brief Q&A with Politico is with Roy Schoenberg of Amwell and covers the state of telehealth, obstacles, abortion, consolidation, and automation. He stays pretty much on message with no surprises as the questions are short and, as is the practice, pre-submitted:

  • Telehealth is a distribution arm of healthcare, not just videoconferencing
  • The biggest war in telehealth remains state licensure–as it was pre-pandemic, past the ‘jumping in’ stage
  • Telehealth will not be a ‘pill mill’ for abortion pills (abortifacients) or controlled substances–it will be based on clinician professional judgment. (In the Editor’s opinion, this ‘hot potato’ was pre-written by the legal department.)
  • Consolidation as a question is not answered. We will see telehealth delivered by large healthcare organizations and telehealth that works with multiple brands. (What is not addressed is what telehealth services large healthcare organizations will go forward in using–the ‘high-priced spread’ of all-inclusives or the white-labels)
  • His opinion around automation is that it will be split between the camps of replacing clinicians, or augmenting them plus giving patients the opportunity to manage their health reality. (One wonders for what reality Amwell is preparing)

Teladoc’s new chief medical officer Raman-Tangella is also on the healthcare charm offensive with a Healthcare Dive interview on strategy and new products. She discusses enterprise clinical strategy and whole-person care, which echoes the Gorevic interview. There’s a diversion to ‘health equity’ which is first defined as a continuum [Editor’s term] of gathering data, taking solutions to customers, and seeking outcomes that validate the first two. She then moves on to closing care gaps through this information, especially in musculoskeletal and physical therapy, and returning to health equity, disparities and then (what we used to define as) proactive care based on all this patient information.

Forget the fork. SPACs as an IPO method are burnt and heading to the trash bin. Again [TTA 9 June] we have PrivCo’s Daily Stack addressing their demise, this time quantifying the crack of the full SPAC market (in and outside healthcare):

  • From one in 2009 to 248 in 2020
  • 2021: an estimated 50% of the total US IPO market in Q1 with 299 listings valued at $98.3 billion
  • 2022: 18 registrations this entire 2022 year and still in the process of raising $2 billion. (This Editor noted that the only healthcare SPAC apparently in progress is VSee and iDoc Telehealth with Digital Health Acquisition Corporation to close in Q3.)

As we’ve previously noted, SPACs are under attack by the SEC and by perpetual hair-on-fire for the press Senators such as  Elizabeth Warren. According to Bloomberg (sign-in needed), 30 SPACs have been called off this year. And as we’ve noted, there are healthcare SPACs like SOC Telemed which went private at a fire sale discount. Others like Owlet, Headspace, and Talkspace are struggling. Watchful eyes are on late SPACs such as Pear Therapeutics and Babylon Health. It’s a less-than-grand finale to what was touted as a low-muss way to IPO.

Wednesday news roundup: March telehealth claims down to 4.6%, state telehealth waivers expiring, UnitedHealth’s Optum bids for EMIS, Talkspace reportedly rejected Amwell, Mindpath bids

June 22, 2022 | by

Telehealth usage continuing its downward trend. At 4.6%, telehealth medical claims in March were off over 6% (0.3 points) versus February’s 4.9%. Again, 65% of claims were for mental health conditions, and social workers were the leading providers of telehealth at 32% for primarily one hour of psychotherapy at 26%. FAIR Health monthly US tracker.

One possible contributing factor is states pulling back on the broad telehealth provider location and other waivers (such as platforms) that were enacted during the Covid emergency. These waivers primarily permitted out-of-state providers. The expiration of waivers thus return telehealth delivery to in-state licensed providers unless covered by other regulations, for instance Medicaid. Last year, 26 states waived in-state licensure requirements; this year, only 12 states have these waivers. California and New Jersey are due to expire soon.  NBC News with a hat tip to HISTalk.

Optum bids to buy UK health software provider EMIS. The bid of £1.24 billion ($1.5 billion) was announced last Friday. A UK affiliate of Optum, Bordeaux UK Holdings II Limited, is the actual entity for the acquisition, recommended by the EMIS board. The offer is in cash and represents a 49% premium to the current share price. EMIS is a leading provider of software and systems to the NHS, serving primary care, community care and pharmacy, acute care, and the Patient.info website. When completed, EMIS would be UnitedHealth’s largest acquisition in the UK and Europe. FierceHealthcare 

Troubled telementalhealth provider Talkspace reportedly rejected a bid from Amwell pretty much out of hand, leading to speculation that it’s up for sale but being picky-picky-picky.  According to the report in Behavioral Health Business, from Seeking Alpha, their talks did not even reach number discussions. This is after Talkspace rejected another bid in May from another telementalhealth provider Mindpath, backed by Centerbridge Partners and Leonard Green & Partners. Sources were split on whether $500 million was offered or not (Axios).

Talkspace is one of the poster children for Cracking SPACs. It hit the market in January 2021 at a valuation of $1.4 billion, opening above $8, hitting a peak of about $11 per share. Share price declined to as low as $1.06 before rising on this acquisition talk to $1.58. Current valuation is $58 million, but it is sitting on a reported $184 million in cash. Reportedly their CEO search is going nowhere. Much like Teladoc, one year after their SPAC, investor lawsuits were filed against the company for misleading investors. Look for Talkspace to be sold over the summer.

Some thoughts on Teladoc and the Week That Was in telehealth

May 4, 2022 | by

Yes, your Editor has, for the past few weeks, felt like Pepper the Robot, moving at two speeds–crazed and off. (‘Off ‘ to the left. Now cart me off.) Home renovations, with strangers tramping through your abode, noise, dust, and the corresponding moving of furniture, packing and unpacking, pre- and post-cleaning, then trying to put things right and get your life back will do that. Add to that an unexpected gushy kitchen sink that took three ‘fixes’ to get actually fixed. Then there were technical problems with our email sender that Editor and Administrator Emeritus Steve had to work through. One becomes more appreciative of order, routine, and Peace and Quiet.

Speaking of Peace and Quiet, there is little to be found in telehealth. Instead, there is a lot of Feeling Off. The Big News of late last week, of course, was Teladoc’s troubles. In the words of Seeking Alpha, they had one horrific quarter. The horror show started with writing off the Livongo acquisition– a noncash goodwill impairment charge of $6.6 billion, for a massive loss of $41.11 per share for a total of $41.58 per share. To compare, last year’s Q1 loss was $1.31 per share. While revenues were up almost to projection (25%), it was still a $3 million miss and in context, it was the cherry on a very nasty sundae. After rosy projections last year, Teladoc lowered their 2022 revenue guidance from $2.6 billion to $2.45 billion.  

Moving forward from the questionable Livongo acquisition at the absolute peak of the market, CEO Jason Gorevic admitted some hard truths to investors that deepened the hole: much more competition, particularly in telemental health; the rising cost of paid search advertising and the keywords driving towards direct-to-consumer telehealth driving up the cost of acquisition; and difficulty closing B2B deals. This creates, in the terms of analyst SVB Leerink’s Stephanie Davis quoted in FierceHealthIT, “a direct-to-consumer air pocket that business-to-business sales (and their inherently longer cycles) are too slow to fill” at least, in her view, until the end of the year.

Teladoc’s difficulties, as this Editor has noted, started after a peak in early 2021 as the pandemic started its protracted wind-down and telehealth volumes plunged to well below 5% of claims as practices reopened. The stock value is down over 90% from last February, not helped by a volatile market triggered by war and inflation. Similar difficulties are plaguing Amwell (down 92% since February 2021), Talkspace (down to a paltry 16 cents and in court for misleading investors), SOC Telemed (taken private at a 70% drop in value, TTA 8 Feb), and other health tech companies. For our Readers, this is no surprise: the telehealth bender is ovah.

One industry leader in a post-ATA conversation with this Editor cited a less obvious factor–that hospitals and other health providers are now putting together their own telehealth/triage packages tied into population health and case management software, with and without ‘white label’ providers such as Bluestream Health and Zipnosis (acquired by insurtech/payvider Bright Health a year ago). Teladoc is a late entry to this provider/payer market with Primary360, where they also compete with Babylon Health [TTA 7 Oct 22]. And health retailers have joined the primary care telehealth game. Walmart last week announced a virtual health diabetes care program for employers through their recently acquired MeMD.

Big Telehealth’s troubles may depress investment in related earlier stage companies–or help those in niches such as telemental and population health, or remote patient monitoring (RPM) systems that have telehealth features (e.g. TytoCare), as VC investment seeks a brighter home. Right now, this Editor’s Magic 8 Ball is saying ‘outlook, cloudy”. 

News/deals roundup: Amazon’s health accelerator, digital health library opens, Ziegler’s ‘Hospital at Home’ paper, SEHTA announces MedTech event; $670M in funding for Talkspace, Pear, DrChrono, NuvoAir

June 25, 2021 | by

First, the news….

Another Amazon angle on healthcare. This time, it’s the Amazon Web Services (AWS) Accelerator for healthcare startups. It’s designed as a virtual four-week technical, business, and mentorship for 10 select companies. Naturally, it’s targeted to cloud-based operations for companies with ‘demonstrated commercial traction’ in remote patient monitoring, voice technology, analytics, patient engagement, and virtual care technologies and systems. Applications opened on 21 June and proposals are due 23 July. It’s limited to US-based healthcare startups or international startups with existing US operations. This round is in collaboration with KidsX, the world’s largest pediatrics digital health accelerator formed by a consortium of over 50 children’s hospitals from North America, Europe, and Australia. AWS blog announcement, FierceHealthcare

A crowdsourced library exclusively for digital health resources and research now open. The Clinical and Translational Science Institute (CTSI) and Center for Health + Technology (CHeT) at the University of Rochester have created a crowdsourced library for the digital health community. It’s hosted by the Digital Medicine Society (DiMe); the link to the library is here. “Resources” are defined as specific pieces of specific regulations, guidances, policy, or literature that are relevant and useful “as-is”. 

Another free resource is investment bank Ziegler’s white paper on ‘Hospital at Home’. The paper addresses the leading Hospital at Home models, providers, and the reimbursement dynamics for this growing tech-enabled option serving acute patients requiring higher medical care. A worthwhile read (24 pages)-see if your tech can fit into these models.

In the UK, SEHTA (South East Health Technology Alliance) announced their 2021 International MedTech conference on 8 October in a hybrid live and virtual event format. The live portion will be at the Hilton London Tower Bridge Hotel. They’ve also added a new director, Sven Bunn, Life Sciences Programme Director at Barts NHS Health Trust & Queen Mary University of London. SEHTA news page

A lightning roundup of $670 million in deals that aren’t taking the summer off….

Talkspace finally executing its SPAC with Hudson Executive Investment Corp., with a deal expected to give the company $250 million in capital. It was originally announced in mid-January [TTA 14 Jan]. Talkspace is a consumer mental health app that helps a user assess their concerns, then matches them with a therapist. Shares are listed at $8.90 on Nasdaq with approximately 152 million shares outstanding for a valuation of $1.4 billion. Mobihealthnews

Pear Therapeutics is planning a hefty SPAC towards the end of this year with Thimble Point Acquisition Corp., backed by Pritzker family interests. It’s estimated that it will round up about $400 million giving it a valuation of $1.6 billion. The new Pear Holdings will trade on Nasdaq as “PEAR”. Pear develops end-to-end platforms for prescription digital therapeutics (PDTs) for serious diseases as stand-alone software treatments or jointly with pharmaceuticals. Pear release, FierceBiotech

Mobile-friendly EHR DrChrono now has a friendly $12 million in growth funding from ORIX Growth Capital. DrChrono also handles practice billing and management. This is on top of their January funding of $20 million, also by ORIX. Mobihealthnews (exclusive)

Stockholm-based digital respiratory care management system NuvoAir also raised $12 million (€10 million) to expand its chronic disease management and clinical trial platforms. It combines an app with data from a spirometer and sensors that attaches to asthma and COPD inhalers plus NuvoAir Cough, which assesses changes in nighttime coughing. The Series A was led by AlbionVC. Mobihealthnews, TechCrunch

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

February 17, 2021 | by

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)

January 29, 2021 | by

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

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

January 14, 2021 | by

Short takes on news snippets from just about everywhere. It’s been that kind of a week. (Picture: the famous Raymond Loewy-designed ’49 Studebaker Commander, of which it was joked ‘you can’t tell whether it’s coming or going)

Google-owned YouTube has decided to take a more organized approach to healthcare content with the hiring from CVS Health of Garth Graham, MD, who will serve as its director and global head of healthcare. At CVS, he was chief community health officer and president of the Aetna Foundation. His portfolio will include the development of content from providers including the Cleveland Clinic, the Mayo Clinic, the National Academy of Health, and Harvard’s School of Public Health. It’s seen as a platform for video-formatted health education both US and globally. The importance to Google is evident in the reporting line: Dr. Graham will report to Karen DeSalvo, MD, the chief health officer at Google. One wonders if the next step is the curating (a/k/a demonetizing or removal) of health content not Google-generated. FierceHealthcare, YouTube press release

Some states have done well on COVID-19 distribution. Others haven’t. It apparently doesn’t matter if you’re large or small. In the US, states were given vaccines based on CDC information and consultation with them. The states then designed their own distribution and priorities. Here’s a running tally on Becker’s Hospital Review Meanwhile, back in Hackerville, the European Medicines Agency (EMA) confirmed on 12 January that data relating to regulatory submissions by Moderna, Pfizer, and BioNTech that were on a hacked server was leaked to the internet. Becker’s

In IPO/M&A news:

Centene Corporation is acquiring Magellan Health, a behavioral health, specialty healthcare, and pharmacy management company, for $2.2 billion. Centene continues its transformation into a UnitedHealthcare structured company, with payer programs on one side and health services including population health management, data analytics and other areas of health tech on the other side. Magellan will be operated independently. The deal requires Federal and state review, and is expected to close in second half 2021. Release  Magellan this week announced its lead investment in a $20 million Series B raise by Philadelphia-based NeuroFlow, a clinical behavioral health monitoring system. Philadelphia Business Journal

Amwell announced a public offering of over 11 million shares. The date and pricing for the offering were not mentioned in the release, but at the current share price of $28, this would raise in excess of $308 million. This is on top of their socko IPO last September which raised in excess of $700 million. 

Behavioral therapy continues to be hot, with online behavioral therapy company Talkspace going the SPAC ‘blank check’ route in merging with investor company Hudson Executive Investment. It provides them with $250 million cash. Estimated net revenue is $125 million in 2021, up 69 percent from 2020, creating an enterprise value of $1.4 bn, which is quite a reach. Healthcare Dive, release.

Medicare Advantage payer Clover Health of Jersey City, NJ also went the SPAC route this week with Social Capital Hedosophia Holdings Corp. III, giving it an enterprise value of approximately $3.7 billion. Clover Health styles itself as a health tech company as it analyzes member health and behavioral data to improve medical outcomes and lower costs for patients, many of whom have multiple chronic conditions or are classified as underserved.  Release

Israel’s Itamar Health, which focuses on integrating sleep apnea management into the cardiac patient care pathway, is buying SF-based Spry Health for an undisclosed amount. Founded in 2014, Spry has an FDA-cleared wrist-worn device, the Loop System, that monitors SpO2, respiration rate, and heart rate. Itamar plans to develop a wrist-worn device based on their Peripheral Arterial Tonometry (PAT) immediately, with initial market launch anticipated in 2022. Release

Hinge Health’s Series D raised $300 million and a new valuation of the company at $3 bn. (Remember when $1 bn was a unicorn amount?) Hinge’s specialty is musculoskeletal–a virtual MSK Clinic for back and joint pain care and rehab including access to physical therapists, physicians, health coaches, and wearable sensors to guide exercise therapy. Release

In startup news…Under the radar, Japan has been developing a crop of health tech startups. They were highlighted at this year’s virtual CES by Jetro–the Japan External Trade Organization. Their CES web page has a teaser video and sortable profiles on companies, many of which look very interesting. According to their materials, there are perhaps 10,000 Japan startups but few of them make it out of Japan. This Editor looked forward to their presentation on ‘Turning the Super Aging Society into a Super Smart Society’ yesterday evening, but virtual doesn’t mean that links work or events actually happen, so our reporting will attach some statistics on their super-aging society, as well as a comparison with other countries (PDF).