Thursday news roundup: Cigna deploys over $12B for investment, Cerner’s Feinberg to Humana board, Teladoc on Amazon Alexa, admitting Livongo problems, and XRHealth VR therapy scores $10M

Cigna’s opportunity piggybank just added $12 billion+. It’s a combination of selling off non-core businesses, share repurchasing authorization, and redeploying funds to areas such as capital investment and Cigna Ventures. This includes:

  • $5.4 billion after-tax from the sale of its international life, accident, and supplemental benefits businesses in seven countries
  • $450 million invested in Cigna Ventures, its innovation investment arm
  • An expected $7 billion for share repurchase this year from a $10 billion authorization. To date this year, Cigna has already repurchased $1.2 billion of shares.

The Cigna Ventures funding will go towards three announced areas: insights and analytics; digital health and experience; and care delivery and enablement. Originally formed in 2018 with $250 million, they now have seven VC partners and 15 direct investments, including Arcadia, Babyscripts, Cricket Health, Ginger, Omada, and RecoveryOne. 

Buried in the release is this: “…the company is not currently contemplating large-scale mergers or acquisitions” which would seem to put a tight lid on the long-rumored acquisition of parts or all of Centene [TTA 28 Jan]. (Too much wake turbulence?) But following on this, “The company intends to continue making strategic investments in innovation through targeted bolt-on or tuck-in acquisitions” which fits sell-offs, as well as investment in early-stage companies through Cigna Ventures. Also FierceHealthcare

Insurer Humana’s board expands to 14 with the addition of David Feinberg, MD, the current CEO of Cerner and future executive of Oracle, provided the merger is approved. He joins the current seven independent directors on the Humana board. Last week, Starboard Value LP, an activist investor hedge fund, reached an agreement with Humana to appoint two Starboard-backed board members starting next month and retire two incumbents. Humana limped through last year with a $14 million Q4 loss and Medicare Advantage losses to both traditional rivals and insurtechs. With over 25 years in healthcare management including CEO positions at Geisinger Health System and three divisions of UCLA Health, it’s a smart move. Release, FierceHealthcare

“Alexa, I want to talk to a doctor”–and that doc will be through Teladoc. Amazon customers with supported Echo devices, such as an Echo, Echo Dot, and Echo Show, will now be able to access Teladoc and a virtual care session 24/7. Initially it will be voice-only with audio/video to come. The release states that visits may be free through insurance or $75 direct pay. It did give a much-needed lift to Teladoc shares, which have been hammered by 76% in the past year, on the announcement and in the past few days, feeding the usual rumor mill that Amazon may be writing a check for Teladoc shares.

Teladoc has finally admitted via its annual report (SEC 10-K) that the Livongo acquisition has not been all beer and skittles. It impacted its indebtedness (page 35) and on page 52, significant insecurities on the integration of the two companies, well over a year after the acquisition.

Our failure to meet the challenges involved in successfully integrating the operations of the two companies or to otherwise realize any of the anticipated benefits of the merger, including additional cost savings and synergies, could impair our operations. In addition, the overall integration of Livongo post-merger will continue to be a time-consuming and expensive process that, without proper planning and effective and timely implementation, could significantly disrupt our business.

Healthcare IT News and HISTalk

VR physical therapy has remained a “we try harder” area of telehealth for several years, with a lot of initial promise in treating returning veterans with PTSD in de-escalating symptoms but having a hard time getting takeup. XRHealth, an early-stage company offering VR-driven physical, occupational, and speech therapies, gained a $10 million venture round backed by HTC, Bridges Israel impact investment fund, AARP, and crowdfunding on StartEngine.com and existing investors. According to Crunchbase, this is par for their course since 2016; their total of $35 million has been in pre-seed, seed, grant, crowd, and venture funding. Based in Brookline, Massachusetts with R&D in Israel, it is good to see them progress, having ‘been there and done that’ with two early-stage health tech firms.

However, their release does them a great disservice. It is, frankly, 90% nonsense in trying to position them out of the gate as “the gateway to the healthcare metaverse” and “growing the open ecosystem and providing greater access to care while reducing costs. Interoperability is key…”. This Editor had to go to their website to find out what they do. As a marketer and reporter, the First Rule of Press Releases is say what the news is, what the company does, and why it’s important in the first two paragraphs. The rest is reinforcement and expansion, with the spokesperson quote part of that and never in paragraph #2. Additional advice: don’t pick up a word now branded by Facebook (Meta). Hat tip to HISTalk

Short takes: 2022’s big kickoff with Babylon-Higi, Vera-Castlight buys; will funding slow down in ’22, eye-tracking telehealth for MS, vital signs tracking lightbulbs at CES 2022, and three catchups!

Babylon Health closed out 2021 by acquiring health kiosk Higi for an undisclosed amount. Babylon had earlier invested in Higi’s Series B [TTA 30 May 20] and was reported in October to be exercising its $30 million option to buy Higi after closing their SPAC. Release

Vera Whole Health, an advanced primary care provider and clinic group based in Seattle, is acquiring Castlight Health, a data and care navigation platform. Vera will acquire Castlight in a $370 million all-cash deal. Strategic partners and investors include Anthem, Morgan Health (the JP Morgan Chase & Co business for the transformation of employee healthcare), Central Ohio Primary Care, and Clayton, Dubilier & Rice funds. Former Aetna chairman and CEO Ron Williams will become chairman. Release.

Which leads to the usual question…will funding in 2022 continue the hot streak of 2021? It’s one opinion, but Lee Shapiro of 7wireVentures, formerly with Livongo, is sensing a slowdown, citing increased interest rates (money), the US midterm elections (which don’t affect the rest of the world), less new money, and investors wising up on the length of time any healthcare or health tech investment takes to pay off. 2021 with 79 digital health M&As plus an abundance of SPACs that tailed off by end of year will be hard to match. Mobihealthnews

XRHealth, a telehealth clinic that provides treatments in patients’ homes based on virtual reality treatment, has integrated Tobii‘s eye-tracking technology into the XR platform and the Pico Neo 3 Pro Eye VR headset. XR Health provides rehabilitative and pain management therapies via VR. The Tobii system will enable treatment using the headset for multiple sclerosis (MS), Parkinson’s, and other neurological conditions. According to the release published in Multiple Sclerosis News Today, “detecting subtle changes in eye movement can help diagnose these diseases at an early stage, as well as assess disease progression and response to treatment. Tobii‘s eye-tracking technology is able to detect those changes in real time, providing data and insights to clinicians during therapy sessions.” Hat tip to Editor Emeritus Steve Hards

CES 2022 is on this week, far less splashy than before as an in-person/virtual hybrid event. Debuting at CES is the Sengled Smart Health Monitoring Light. Looking like a standard LED lamp bulb, it contains sensors that network and can take passive vital signs measurements of sleep quality, breathing, heart rate, and motion of occupants in the home. The more bulbs the better, of course. Whether or not they can detect falls, as the article touts, is likely an inference on motion. They feed into either Alexa or Google Assistant, plus Sengled’s app, using Frequency-Modulated Continuous Wave (FMCW) radar operating in the 2.4 GHz range. Expect it to be coming out towards the end of the year and probably twice the price of conventional LED smart bulbs. TechRadar Hat tip to Adrian Scaife via LinkedIn

Catching up…

Walgreens and VillageMD continue on the ‘go big or go home’ highway with nine more Village Medicals at Walgreens in San Antonio, Texas. Plans are to build 600 Village Medicals at Walgreens in more than 30 markets by 2025, growing to 1,000 by 2027. HealthcareFinance

Centene, the health payer conglomerate, finalized its $2.2 billion acquisition of Magellan Health, a major behavioral health management company. It will likely be CEO Michael Neidorff’s swan song, as an activist investor forced his retirement (at age 78 after over 25 years at the helm) this year and significant board changes. Magellan’s former COO and president Jim Murray will become Centene’s chief transformation officer, a new position, lead what they term the Value Creation Office as well as the Centene Advanced Behavioral Health division. Forbes, Centene release

And suitors with a spare billion or so may be lining up to buy IBM Watson Health. The first offers came in on 4 January with the winner to be announced possibly by end of the month. IBM spent over $4 billion over time to build up Watson Health, but now wants out, badly. Axios