Roundup: Virgin Pulse, NextGen close fast; Elucid, Eleos, Vida, Neteera funding; One Medical-CommonSpirit; Indian Health $2.5B EHR to General Dynamics+Oracle; losses, layoffs at Cano Health, 15% digital cuts at Mass General Brigham

No surprise that some big deals in digital health closed at year’s end before we roll out the turkey and the holiday decorations.

  • The Virgin Pulse-HealthComp merger that adds benefits analytics to Virgin’s employee wellness platform closed last Thursday (9 November). It was announced only in late September [TTA 29 Sep]. This creates what they estimate is a $3 billion company. Ownership is also changing to New Mountain Capital, the owner of HealthComp, now as the majority owner of the new company with Marlin Equity Partners in minority ownership with others including Blackstone and Morgan Health. Other than Chris Michalak becoming CEO of Virgin Pulse and HealthComp, there is no confirmation of financing nor management/employee transitions or headquarters (Virgin is in Providence Rhode Island, HealthComp in Fresno California). Virgin release
  • EHR NextGen closed its $1.8 billion taking-private by private equity firm Thoma Bravo after shareholders approved it the previous Tuesday for $23.95/share in cash. This was announced around US Labor Day and closed in record time on Friday 10 November. As previously noted, this ended 41 years of public trading for a company that was one of the pioneers of EHRs and practice management. In its release, Thoma Bravo will “leverage its operational and software expertise” and “adding new products and capabilities, both organically and inorganically, to continue enabling NextGen Healthcare’s customers to deliver exceptional patient outcomes.” Healthcare Dive, FierceHealthcare (also Virgin Pulse)

Are these lights at the end of the dark M&A tunnel for health tech and related? Or avoiding the oncoming train of FTC and DOJ regulations that collide head-on with M&A with the pending imposition of the Draft Merger Guidelines and the Premerger Notification rules under Hart-Scott-Rodino (HSR)?

It seems like top digital health law firm Epstein Becker Green has caught up with Editor Cassandra [TTA 20 July, 20 June]  in this Diagnosing Health Care Podcast of 10 November. Fun estimate: the time in filing a premerger notification may be increased by 289%. The cloudy crystal ball was clear indeed….

Last week was also a busy time for smaller companies’ fundings–even letter rounds! 

  • Elucid scored $80 million in Series C funding led by led by Elevage Medical Technologies, bringing total funding for this AI-assisted cardiovascular imaging company. They have the “only FDA-cleared non-invasive tool able to accurately characterize arterial plaque, simulating what pathologists would see under a microscope and establishing a histologic ground truth. The company is also pursuing an indication for non-invasive measurement of fractional flow reserve (FFRCT), uniquely derived from its PlaqueIQ technology, to measure coronary blockages and the extent of ischemia.” Release
  • In behavioral health, Eleos Health now has $40 million in Series B funding to add to previous funding of $28 million. The Series B was led by Menlo Ventures, with participation from F-Prime Capital, Eight Roads, Arkin Digital Health, SamsungNEXT, and ION. Eleos has developed AI-assisted solutions for group therapy sessions, compliance automation, case management, concurrent documentation, and value-based care support. They will use the additional funding for further development as well as network expansion and EHR partnerships. Release
  • Vida Health, which offers health coaching for chronic conditions, primarily obesity and diabetes management, gained $28.5 million in an unlettered round led by existing investors Ally Bridge, Canvas Ventures, General Atlantic, Hercules Capital, and others. Vida also announced a change of CEOs. Joe Murad succeeds Stephanie Tilenius, who is stepping down after nine years as founder/CEO, transitioning to an advisory capacity. Mr. Murad joins the company’s board. He was previously with WithMe Health, where he was president/CEO for nearly five years and previously headed PokitDoc before its acquisition by Change Healthcare in 2018. Release  Also Mobihealthnews on Elucid, Eleos, and Vida.
  • Israeli RPM company Neteera now has an additional $6.7 million as part of a Series B extension. Their unique RPM uses sub-THZ radar to monitor vital signs through bedding and clothing, then analyzes the data and produces reports on its platform. Neteera partners with Foxconn on their RPM and currently sells to long-term care facilities in the US.  Pulse 2.0

Amazon’s One Medical announced a partnership with CommonSpirit Health’s Virginia Mason Franciscan Health (VMFH) in the Seattle Puget Sound metro. This will add integrated specialty care in that area to One Medical’s primary care focus. VMFH has 2,000 providers in an integrated network of providers, outpatient facilities, and hospitals. Financials weren’t disclosed, but according to Becker’s, in another One Medical partnership, a health system disclosed that it “reimburses One Medical for providing care on its behalf and collects the fee-for-service revenue from the patient visits. One Medical previously collaborated with Seattle-based Swedish (part of Renton, Wash.-based Providence) in the region.” VMFH release, FierceHealthcare

The federal Indian Health System (IHS) is modernizing its EHR and moving to a General Dynamics IT-managed Oracle Cerner system. Its current system is the 40+-year-old Resource and Patient Management System–based on (surprise!) VistA. What is most interesting in the release is that General Dynamics Information Technology (IT) is listed as the primary contractor that will “build, configure, and maintain a new IHS enterprise Electronic Health Record system utilizing Oracle Cerner technology.” One very interesting bit of verbiage! The IHS used an “Indefinite Delivery, Indefinite Quantity” contract structure for this requirement which is explained as “the IHS will issue specific task orders for technical support and services. This gives the IHS the ability to adjust what it purchases, incorporate lessons learned, user input, and availability of new technology.” Reports indicate its ultimate value to General Dynamics IT in the 10-year contract to be close to $2.5 billion. IHS provides healthcare services for 2.8 million American Indians and Native Alaskans belonging to over 570 tribes. IHS release, Healthcare IT News

Cano Health continues its hemorrhage. Q3 loss was $497.1 million in Q3, with a cut of 21% of its workforce, or approximately 842 staff. Their loss was 4x times the year-prior Q3 on revenue of $788.1 million. Adding to operating losses, they were hit with a $354 million impairment charge and poor operating results from higher third-party medical costs. 52% of the staff cuts reflect the sales of operating units such as in Texas and Nevada to Humana CenterWell and exits in California, New Mexico, and Illinois. The remaining 48% is from restructuring. Now a Florida-only operation except for Puerto Rico (ending early 2024), they are concentrating on ACO REACH and Medicare Advantage there. Their clinics are now 126, down from 169 at the end of June. Cano is still looking for a buyer, which indicates that they anticipate further rough going. Healthcare Dive, Cano Health Q3 Financial Powerpoint

And winding up the bad news, Mass General Brigham, which is partnering with Best Buy for their Healthcare at Home programs, will be doing it with at least 15% fewer digital staff. They are offering voluntary separation packages to those employees in the hope of finding enough takers. The offer is a not especially generous two weeks of severance for every year of service. If the magic number of 15% is not reached, layoffs will start after Thanksgiving. Reportedly a state agency, the Massachusetts Health Policy Commission, has deemed that MGB’s cost growth is too much. MGB is the largest private employer in Massachusetts with 80,000 workers. The offers were floated starting from 1 November and will close on 15 November, with layoffs if needed to be announced on 4 December. The targeting of digital is claimed to be for modernization. The area is responsible for multiple areas of IT and maintaining patients’ electronic health records. Boston Herald, Healthcare Dive

News and funding roundup: Vida Health’s $100M Series D, Kry’s $316M raise, CVS and Advocate Aurora’s fresh funds, Boost Mobile offers K Health symptom checker

Vida Health, a virtual platform for chronic condition and mental health management, raised $110 million in a Series D financing led by General Atlantic, joined by Centene, AXA Venture Partners (AVP), and Ardea Capital Partners along with a number of earlier investors. Vida has a network of clinicians, mental health coaches, dietitians, and licensed therapists to provide virtual care programs to payers like Centene and Humana, plus employers such as Boeing, Visa, Cisco, and eBay. The company reports that it tripled its revenue since January 2020 and expanded its existing nationwide network of therapists, coaches, dietitians, and diabetes educators by more than 400 percent. Vida’s involvement with Centene started with a 20-state rollout in the Ambetter plans, the Centene health insurance marketplace product, Ambetter, for members with chronic conditions such as diabetes, high blood pressure, obesity, and treatment/coaching for mental health conditions like stress and depression. Vida’s total financing since 2014 totals $188 million. Release, Crunchbase, Mobihealthnews

Sweden’s Kry (Livi in the UK, US, and France) raised a Series D of €262 million, or about $316 million to finance expansion into additional countries and to scale their telemedicine platform. The Ontario Teachers’ Pension Plan Teachers’ Innovation Platform, along with existing investors Index Ventures, Creandum, and Accel, led the round. Valuation is now estimated at about $2B (nearly €1.66 bn). Silicon Canals, FierceBiotech

If you’re looking for funding, CVS Health has launched a $100 million venture capital fund to capitalize projects and innovations from digital healthcare and tech companies to make healthcare more accessible, affordable, and…better. CVS and Aetna have already been an investor in digital health, with about 20 such findings. More information on CVS Health Ventures is hereRelease

Want more funding? Advocate Aurora Enterprises (AAE), part of Advocate Aurora Health System in Illinois and Wisconsin, also is funding consumer health and wellness, with recent buys of home care company Senior Helpers in a $180 million deal following on $25 million for a telenutrition (!) company, Foodsmart. Some have questioned how nonprofit health systems like Advocate Aurora and Ascension have deep enough pockets to get into the risky funding business. FierceHealthcare, Healthcare Dive.

Finally, in the Everybody’s Getting Into The Telehealth Act Department, Boost Mobile is offering the K Health symptom checker to its customers and immediate families. The catch: you have to subscribe to their Unlimited Plus plan. But clever, though. HITConsultant