Mercom Capital Group has recently issued its report on digital health funding and mergers & acquisitions (M&A) activity for the first half of 2021. Digital health venture capital (VC) funding increased 138% compared to the first half of 2020, reaching almost $15 billion. Telemedicine was the largest category for VC funding for both years. M&A activity also increased by 64% compared to the first half of 2020, reaching 136 M&A transactions. There were 12 initial public offerings (IPOs) in the digital health space in the first half of 2021, the highest number since 2010 (the year Mercom began tracking digital health funding).
The report covers both consumer-centric technologies and practice-centric technologies. In the category of consumer-centric technologies, Mercom includes telehealth, mobile health, personal health and price comparison/scheduling technologies. Practice-centric technologies include health information management (including electronic health records, clinical decision support and computerized physician order entry [CPOE]), revenue cycle management, data security and privacy and certain outsourcing services. Practice-focused companies accounted for the largest segment of M&A activity in the first half.
- Published: 15 August 2021 15 August 2021
Pear Therapeutics, Inc. (Pear) and Thimble Point Acquisition Corporation (THMA) have agreed to enter into a merger which will result in Pear becoming a wholly-owned subsidiary of THMA. THMA is a special purpose acquisition company (SPAC) that targets high-growth technology-enabled businesses. (SPACs are also known as blank check companies, because investors in the SPAC acquire interests in the SPAC before a specific acquisition target is identified.) SPAC transactions allow the target to go public without utilizing an initial public offering or direct listing. The Pear transaction values the company at a pro forma enterprise value of $1.2 billion, and will leave $450 million in cash on Pear's balance sheet after closing.
Pear was founded in 2013, and has developed the first three prescription digital therapeutics (PDTs) authorized by the Food and Drug Administration (FDA). PDTs are software-based therapeutic interventions that are prescribed by clinicians to treat conditions. Pear's FDA-approved PDTs are authorized for treatment of addiction to alcohol, cannabis, cocaine and stimulants; opioid use disorder; and chronic insomnia. Pear claims to have 14 product candidates in its pipeline, a scalable infrastructure to discover and develop new PDTs, and a platform capable of hosting PDTs developed by Pear and third parties utilizing a clinician dashboard. Products currently in the pipeline include products for psychiatric, neurologic and gastrointestinal disorders. Pear evaluates the overall addressable market for PDTs to be over $250 billion in the U.S. According to Morning Consult, the FDA has authorized around 35 to 40 PDTs.
- Published: 26 June 2021 26 June 2021
Doximity, Inc. has filed a second amendment to its registration statement with the Securities & Exchange Commission. The preliminary prospectus filed June 22, 2021 states that Doximity plans to issue 26,795,000 Class A shares, including 3,495,000 shares subject to its reserved share program. The offering price per share was estimated at $23.00 for purposes of calculating the registration fee, but the midpoint of the estimated offering price range is $21.50. Doximity was approved for listing on the New York Stock Exchange on June 16, and plans to use the symbol "DOCS". The reserved share program will be offered to member physicians who meet minimum criteria based on platform activity or attendance at member advisor meetings. It will be administered by Fidelity Capital Markets.
- Published: 22 June 2021 22 June 2021
On June 1, 2021, the Department of Health and Human Services (HHS) announced the formation of a partnership between HHS's Biomedical Advanced Research and Development Authority (BARDA) and the Global Health Investment Corporation (GHIC). GHIC is a nonprofit organization which is the managing member of the Global Health Investment Fund (GHIF). According to its website, GHIF is a $108 million social impact investment fund that supports innovations for public health based on improving or expanding access to existing products. It prioritizes opportunities with "dual market" potential, that will both improve public health in developing countries but will have commercial value in high-income countries. Through its BARDA Ventures program, BARDA intends to provide GHIC with at least $50 million over five years with potential for up to $500 million over ten years, to be part of a global health security fund with matching capital from other investors.
The partnership will be supported by BARDA's Division of Research, Innovation and Ventures (DRIVe), which was launched in 2018. DRIVe currently partners with 37 companies through federal contracts and has a network of 13 accelerators that support early-stage companies, including 154 health security product developers.
- Published: 02 June 2021 02 June 2021
Doximity, Inc. filed a registration statement with the Securities & Exchange Commission on May 28, 2021 for its initial public offering (IPO). The number of Class A shares to be sold and price of shares is not yet specified. The statement specifies that up to 15% of the shares will be reserved for sale to certain qualifying member physicians. The existing Class B shares are held by the company's officers and directors and their affiliates.
Doximity had 1.8 million medical professional members as of March 31, 2021, including more than 80% of US physicians. It also counts 50% of nurse practitioners and physician assistants among its members, as well as 90% of graduating U.S. medical students. Doximity membership is free for physicians; its revenue-generating customers are pharmaceutical manufacturers and health care systems. Doximity states that its cloud-based platform provides tools to its professional members including member profiles for the largest medical professional network in the nation; a newsfeed oriented to the latest medical news; and clinical workflow tools including telehealth, secure messaging and digital faxing. It monetizes its platform through its marketing solutions for pharmaceutical manufacturers and health system customers; hiring solutions for health system customers; and telehealth solutions. With regard to telehealth, Doximity states that it had 63 million telehealth visits in its fiscal year ending March 31, 2021, and subscription agreements with 150 health systems.
- Published: 01 June 2021 01 June 2021
The Department of Justice (DOJ) and Securities & Exchange Commission (SEC) sounded a warning note to entrepreneurs in the healthcare space with the criminal indictment and SEC complaint filed against the founders of uBiome, Inc. The FBI agent handling the case is quoted in the DOJ press release as stating, “This indictment illustrates that the heavily regulated healthcare industry does not lend itself to a ‘move fast and break things’ approach, but rather to an approach of compliance and accountability.”
- Published: 23 March 2021 23 March 2021
Change Healthcare Inc. (Change) announced that it and UnitedHealth Group Incorporated (UnitedHealth) received a second request from the Department of Justice (DOJ) for information relating to their planned merger. The announcement was contained in its Form 8K filed with the Securities & Exchange Commission (SEC) on March 24, 2021. Change and UnitedHealth had originally filed their premerger notification on January 19, 2021, but refiled it on February 22 to allow additional time for review by the DOJ. The second request from the DOJ extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 to 30 days after the companies have substantially complied with the second request. In the proxy statement filed with the SEC on March 5, 2021, Change described itself as “a leading healthcare technology platform that provides data and analytics-driven solutions to improve clinical, financial, administrative, and patient engagement outcomes in the U.S. healthcare system.”
- Published: 29 March 2021 29 March 2021