What You Should Know:

– Waystar, a healthcare payments company, has decided to postpone its initial public offering (IPO) due to the ongoing market turmoil in the United States, according to a confidential source. Reuters first reports the company plans to revive its IPO efforts, but it is likely to wait until December at the earliest or possibly until 2024.

–  The decision to delay the IPO was made in response to the volatility in the broader market. Despite receiving positive feedback from investors during the testing phase, Waystar has opted to wait for more stable market conditions.

– Waystar was reportedly considering an IPO that could value the company at up to $8B, including debt. The company had made its IPO filing public in October and expressed its intention to list on the Nasdaq.

What You Should Know:

– The latest edition of SVB’s Healthcare Investments and Exits report provides information on VC fundraising, investments and M&A and IPO trends – along with subsector analysis and video commentary for each.

– Healthcare trends indicate US healthcare VC investment was healthy in 2022 despite an economic downturn. There’s plenty of dry powder to deploy; however, investments and exits are slowing due to the volatile market.

Trends and Insights – Healthcare Investments

1. Venture capital (VC) fundraising was unprecedented in H1 2022. Despite a slowdown in H2, funds closed out the year with nearly $22B to invest into healthcare companies, second only to the record $28B raised in 2021. With over $50B fundraised in the past two years, venture healthcare has the largest war chest of investable capital ever.

2. Healthcare Investment declined in both deals and dollars each quarter after setting a record in 2021. Total healthcare investment for the year still exceeded 2020, making 2022 the second-largest year ever, though Q3 and Q4 fell below 2020’s quarterly average. This decrease was likely because investors directed new money toward their existing portfolios instead of new investments, raising insider rounds to focus on hitting valuation inflections before the next outside financing. Additionally, the large crossover to initial public offering (IPO) rounds, common in 2020 and 2021, were down significantly in the face of a difficult IPO market.

3. Biopharma early-stage investment activity declined, but valuations appeared unaffected by public market turmoil. At the seed stage, companies raised more syndicated rounds, likely due to the uncertain private financing environment for the upcoming year. In later stages, the number of LIPO (likely to IPO)2 crossover rounds dropped, down to single digits per quarter in H2 2022. Overall, we noted the most significant declines in oncology and neurology investment.

4. Healthtech shifted toward early-stage investment, where valuations were less impacted by public market comps. Investment exceeded the record seed/Series A activity from 2021. In late stages, investors shifted their focus toward companies that were closer to profitability and demonstrated the ability to improve health outcomes, access or affordability. Provider operations (PO) companies received the most investment, with many new financings focused on advancing and digitizing provider workflow and clinical decision support. While alternative care (AC) investment was down overall, mental health and primary care solutions continued to dominate this subsector.

5. Dx/Tools early-stage investment set a new dx/tools record in 2022 as dx tests dollars doubled and dx analytics activity increased. However, the overall sector suffered the largest drop in healthcare investment, specifically in H2, as investors struggled to reconcile frothy valuations with poor IPO performance over the past few years. R&D tools investment suffered the biggest decline while dx analytics excelled, closing financings with three of the top five largest post-money valuations.

6. Device was the only sector in 2022 to nearly match the record investment in 2021, dropping less than 10% overall, despite a sharp decline in Q4 ‘22. Companies in non-invasive monitoring raised big financings across deal stages. Overall, $100M+ deals increased from 2021, as investors gravitated to the device sector’s metric-driven revenue stories. Though valuations stayed steady, investors started to introduce more structured term sheets, including liquidation preferences, in later-stage deals toward the end of the year.

Trends and Insights – Healthcare Exits

1. After a record number of healthcare mergers and acquisitions (M&A) and IPOs in 2021, IPOs2 were down across all sectors as public market-cap erosion and poor performance of the 2020 and 2021 IPO classes largely blocked opportunities for companies to go public. Private M&A also suffered, as acquirers refocused on preserving cash and/or completing internal projects rather than acquiring new companies. The private M&A deals we did see were smaller in value for healthtech, device and dx/tools companies. Though we saw larger deals in biopharma, these companies raised large amounts of private funding, resulting in lower multiples for later-stage investors.

2. Off a record 92 IPOs in 2021, there were just 19 IPOs in 2022, with pre-money valuations falling to 2019 levels and mixed post- IPO performance for the 11 US and EU IPOs. Private M&A was muted, as acquirers focused on recently public companies, trading well off their highs, instead of private companies with static, high valuations. Of the nine M&A in 2022, five were preclinical stage. At the end of the year, Nimbus sold its phase II asset to Takeda for $4B upfront, tied for the second largest upfront ever for a venture-backed biopharma company.

3. IPOs halted as public healthtech stock performance fell throughout 2022. However, M&A volume has remained strong, almost on pace with 2021’s record. Deal sizes for M&A were down and will likely remain smaller as public market comps continue to fall. Public (and private) healthcare companies led healthtech M&A in 2022, but big tech companies also made notable acquisitions of public healthtech companies in 2022.

4. M&A and IPO activity rose to record levels from 2019 through H1 2021 and propelled dx tools exits to record activity. However, since H2 2021, large public companies in the dx/tools sector suffered from declining market caps, and recent IPOs have experienced even worse performance. In 2022, there were no US venture-backed IPOs and only five M&A deals, with a significantly lower median upfront value than the last two years. However, we did see two cross-sector acquisitions of dx/tools companies, with a healthtech company acquiring a dx test company to expand its platform and a biopharma company acquiring an R&D tools company to scale manufacturing.

5. 2021 set a record for the number of IPOs and M&A, with small- and mid-cap public companies joining big players to buy venture-backed device companies. However, poor performance in the public market forced many acquirers to revisit their cash spend and push acquisitions to the back burner. As a result, the US IPO market was effectively shut in 2022. Device M&A was also down, but orthopedics and vascular indications had three exits each.

What You Should Know: 

– Ensemble Health Partners, Inc. (“Ensemble”), a provider of healthcare revenue cycle management solutions for hospitals and affiliated physician groups, announced it has filed to raise $649M for its initial public offering (IPO), at a valuation of $1.2B. 

– Ensemble is offering 29,500,000 shares of its Class A common stock at an initial public offering price between $19 and $22 per share. It also intends to grant the underwriters a 30-day option to purchase up to an additional 4,425,000 shares of its Class A common stock. 

– Ensemble has applied to list its Class A common stock under the ticker symbol “ENSB” on the Nasdaq Global Select Market. 

What You Should Know:

– Pear Therapeutics, the leader in developing and commercializing prescription digital therapeutics to treat serious disease, and Thimble Point Acquisition Corp (Nasdaq: THMA), a special purpose acquisition company (SPAC) whose management team is associated with the Pritzker Vlock Family Office, today announced that they have entered into a definitive business combination agreement.

– Pursuant to the Business Combination Agreement, upon closing of the Business Combination, the combined company will be named Pear Holdings Corp. (the “Combined Company”) and will be led by Pear’s current management team. The Combined Company’s common stock is expected to be listed on Nasdaq under the new ticker symbol “PEAR.”

– The Business Combination values the Combined Company as a pro forma equity value of approximately $1.6 billion and is expected to provide approximately $400 million in gross proceeds.

– Founded in 2013, Pear’s PDT engine enables the discovery, development and commercialization of PDTs at scale. Pear is one of nine companies invited to participate in the U.S. Food and Drug Administration’s (FDA) Precertification Pilot Program. Pear has developed and commercialized the first three FDA-authorized PDTs, has 14 product candidates, and is scaling its platform for third-party product distribution opportunities. The Company’s three FDA-authorized products, reSET®, reSET-O® and Somryst®, address large market opportunities with more than 20 million patients suffering from substance and opioid use disorders and more than 30 million from chronic insomnia, in the U.S. alone, respectively.

By comparison, Q1 of 2020 saw $3.2 billion and 127 investments.  Health IT M&A activity has also been strong in the first quarter, with 114 transactions observed compared to just 88 in Q1 of 2020.  The gradual loosening of pandemic restrictions and government stimulus both promise to continue to fuel this strong market activity into Q2 and into the future.

Haven disbanded in February. The joint venture between Amazon, Berkshire Hathaway, and JP Morgan Chase was founded in 2018 to revolutionize how health insurance was managed and disrupt the healthcare industry.  The three founding companies are expected to take lessons from the venture to continue to innovate individually and collaborate informally.

UnitedHealth’s OptumInsight agreed to acquire Change Healthcare for approximately $8 billion and to assume $5 billion of Change Healthcare debt. The combination is expected to help improve clinical decision support at the point of care, reduce administrative waste, and enable transactional connectivity across the healthcare system.

A coalition of Health and Technology Industry leaders announced the Vaccination Credential Initiative (VCI), in an effort to create a trustworthy, verifiable, and universally recognized digital record of vaccination status worldwide to safely enable people to return to work, school, events, and travel.

HHS Protect further solidified itself as the single source of truth for national COVID-19 patient information, hospitalization levels, hospital capacity, critical equipment supplies, and staffing. Alexis C. Madrigal, co-founder of the COVID Tracking Project, penned an enlightening op-ed in The Atlantic voicing strong support for the system emphasizing the improved quality and granularity of data available after the system was put in place.

The HHS announced a synthetic data challenge to further cultivate Synthea, an open-source synthetic patient generator that models the medical histories of synthetic patients. Synthetic patient data promises to facilitate patient-centered outcomes research by increasing the availability of data and complementing the use of real clinical data.

Amazon announced that Amazon Care will be rolled out nationwide over the summer and will open access for other employers to offer the service as a workplace benefit.

Noteworthy Transactions

Noteworthy M&A transactions during the quarter include:

SOC Telemed acquired Access Physicians for $194mm to solidify its acute care telemedicine services.

Net Health acquired Casamba LLC to support post-acute care providers and expand its cross-continuum solutions.

Anthem, Inc. announced it entered into a definitive agreement to acquire myNEXUS®, a comprehensive home-based nursing management company for payors.

Appriss Health acquired PatientPing to create the largest care coordination network in the U.S.

Omega Healthcare acquired himagine Solutions, provider of medical coding and registry services.

Clinical Navigation platform, Grand Rounds, merged with telehealth provider Doctor On Demand to form a multibillion-dollar digital health company.

Tegria acquired Cumberland, a leading healthcare consulting and services firm for payers and providers, to provide new and enhanced offerings for healthcare providers and payers.

PatientPoint acquired Outcome Health to create a platform offering tech-enabled patient engagement solutions that create more effective doctor-patient interactions across the entire patient care journey.

MDLive announced it has entered into a definitive agreement to be acquired by Cigna’s Evernorth to provide the payer’s healthcare services subsidiary with an integrated virtual care offering.

WEX signed a definitive agreement to acquire certain HSA assets of HealthcareBank for $250mm to better capture the economics from the assets.

MultiPlan Corporation completed the acquisition of Discovery Health Partners, an analytics and technology company offering healthcare revenue and payment integrity services. With the acquisition, MultiPlan strengthens its service offering in the payment integrity market with new and complementary services to help its payor customers manage the overall cost of care and improve their competitiveness. 

Boston Scientific announced an agreement to acquire Preventice Solutions, Inc. to expand rhythm management diagnostics portfolio and capabilities.

Philips announced an agreement to acquire provider of medical device integration and data technologies, Capsule Technologies, for $365 million to transform the delivery of healthcare along the health continuum with integrated solutions.

Accolade announced an agreement to acquire telemedicine start-up 2nd.MD for $460 million.

OptumInsight and Change Healthcare have agreed to merge. Change Healthcare will join with OptumInsight to provide software and data analytics, technology-enabled services and research, advisory, and revenue cycle management offerings to help make health care work better for everyone.

Noteworthy Buyout transactions during the quarter include:

Data and software company serving EMS, fire departments, hospitals and state EMS/trauma offices, ESO received a strategic investment from Vista Equity Partners. 

iN2L, provider of person-centered digital engagement solutions for the senior living market, announced a strategic growth investment from Vista Equity Partners.

Omega Healthcare Investors acquired senior living technology provider Connected Living.

Carrick Capital acquired a majority stake in kidney dialysis-focused company Renalogic.

AUA Private Equity recaped bistroMD, a meal delivery subscription service for weight loss and long-term weight management.

LLR Partners invested in Azalea Health, a rapidly growing provider of cloud-based electronic health record and patient engagement solutions for inpatient and outpatient community health organizations.

Patient payment and end-to-end patient financial engagement technologies, Millennia, announced a growth investment by Pamlico Capital And Eir Partners.

CVC Capital Partners became a majority stakeholder in System C, the UK supplier of health and social care software and services.

Healthcare revenue cycle management company serving the ASC market, National Medical, announced it entered into a strategic partnership with Aquiline Capital Partners.

CloudWave, a cloud and managed services provider for healthcare, received a majority investment from Abry Partners.

Prescient Healthcare Group, a global product strategy advisory firm serving the pharmaceutical and biotech industries, received an investment from Bridgepoint Development Capital

Technology-enabled hub services platform facilitating patient access to specialty medications, CareMetx, announced a strategic growth partnership with General Atlantic and The Vistria Group.

Brentwood Associates recapitalized MedBridge, provider of patient engagement and clinical education solutions for healthcare professionals.

Lightbeam Health Solutions received a strategic investment from Primus Capital.

Noteworthy Investments during the month include:

HR and benefits software solution, Ease, raised $41M Series C Financing to deliver on its Mission to Simplify and Enhance HR and Benefits Administration.

Rightway raised $100 million at a $1.1 billion valuation to continue revolutionizing care navigation and pharmacy benefits.

Cityblock Health raised $192 Million in Series C extension funding to accelerate deployment of its value-based care model nationwide.

Ginger, an on-demand mental health company, announced a $100 Million Series E financing from Blackstone to continue expanding access to value-based mental healthcare globally.

Ro, a vertically integrated primary care telemedicine platform, raised $500 Million in Series D Funding with the intent to expand its pharmacy distribution network, enhance its proprietary EMR, and broaden into additional treatment areas.

Komodo Health secures $220 million in funding led by Tiger Global Management to accelerate investment in its enterprise technology platform designed to help the world’s leading life sciences companies, health plans, and patient advocacy groups improve patient engagement and address unmet patient needs.

Evidation Health, a health data analytics company, raised a $153 million Series E led by OMERS growth equity and Kaiser Permanente with plans to expand its virtual health capabilities.

Unite Us announced a $150 million Series C financing led by ICONIQ Growth at a valuation of $1.6 billion. The company will use the funds to continue its mission of connecting social care and medical care.

Strive Health raised a $140 million Series B led by CapitalG to address $410 billion of unmanaged kidney disease spend.

insitro, a developer of artificial intelligence for drug discovery, raised a $400 million Series C round led by Canada Pension Plan.

BrightInsight raised $101 million in Series C funding led by General Catalyst to expand its team and further differentiate its development platform for regulated software, connected devices, drugs, and digital therapeutics.

Cedar closes a $200 million Series D to continue meeting the accelerating demand for its patient financial engagement platform.

WeDoctor, a telemedicine provider based in Hangzhou, raised $400 million in a pre-IPO round valued at $6.8 billion with investors such as Sequoia Capital China and Millennium Management participating.

BetterUp, an online provider of personalized coaching and content, raised a $125 million Series D led by ICONIQ Growth at a valuation of $1.73 billion to invest in additional innovative products.

Innovaccer raised a $105 million Series D at a $1.3 Billion Valuation, launching Innovaccer Health Cloud, a platform-as-a-service to enable customers and partners to build interoperable applications that improve patient engagement and operational performance.

Health insurtech company Sidecar Health raised $125 million in its Series C at a valuation of $1 billion. The funds will be used to launch a new Affordable Care Act offering for federal and state exchanges.

Valo, a company working to transform the drug discovery and development process with data, raised $190 million in Series B financing.

Noteworthy IPOs/ SPACs during the quarter include:

Continuous glucose monitoring provider, Movano Inc., completed its IPO, raising $42.5 million. 

Medical mobility and transportaiton provider, Ambulnz, announced plans to go public via reverse merger with Motion Acquisition Corp., valuing the Company at $1.1 billion.

Medical network provider, Doximity, confidentially filed for an IPO.

Alignment Healthcare, a provider of privatized Medicare benefits for seniors, completed its IPO, raising $490 million at a valuation of $3.37 billion.

Connected nursery ecosystem, Owlet Baby Care, announced plans to go public via reverse merger with Sandbridge Acquisition.

Sema4, a disruptive AI-driven genomic & clinical data platform company, announced plans for a reverse merger with SPAC CM Life Sciences

23andMe to Merge with Virgin Group’s VG Acquisition Corp. to Become Publicly-Traded Company Set to Revolutionize Personalized Healthcare and Therapeutic Development through Human Genetics

Sharecare and Falcon Capital Acquisition Corp. Reach Agreement to Combine, Creating Publicly Traded Digital Health Company

Signify Health Files Registration Statement for Proposed Initial Public Offering

LumiraDx, a Next-Generation Point of Care Diagnostics Testing Company to List on Nasdaq via Merger with CA Healthcare Acquisition Corp

Hudson Executive Investment Corp had entered into a definitive merger agreement with Talkspace

About Healthcare Growth Partners (HGP)

Healthcare Growth Partners (HGP) is a Houston, TX-based Investment Banking & Strategic Advisory firm exclusively focused on the transformational Health IT market. The firm provides  Sell-Side Advisory, Buy-Side Advisory, Capital Advisory, and Pre-Transaction Growth Strategy services, functioning as the exclusive investment banking advisor to over 100 health IT transactions representing over $2 billion in value since 2007.

What You Should Know:

– Digital health company Sharecare and special purpose acquisition company (SPAC), Falcon Capital Acquisition Corp, today announced an agreement to merge to go public on the NASDAQ under the ticker symbol SHCR at enterprise value of $3.9B.

– The transaction is expected to be funded through a combination of Falcon’s $345 million of cash in trust (assuming no redemptions) supported by a $425 million fully committed PIPE at $10.00 per share and the Anthem investment.

– Jeff Arnold, digital health pioneer and founder of WebMD, will continue to lead the company as CEO and chairman.

Sharecare, the digital health company that helps people manage all of their health in one place, and Falcon Capital Acquisition Corp., a special purpose acquisition company (SPAC), announced today that they have entered into a definitive merger agreement for go public. The new company will become Sharecare, Inc. and be listed on NASDAQ under the ticker symbol SHCR; and is expected to have an initial enterprise value of $3.9B.  

What Is a Special Purpose Acquisition Company (SPAC)?

A special purpose acquisition company (SPAC) known as a “blank check company” is a formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Sharecare plans to leverage approximately $400M in growth capital on the balance sheet to drive sustained growth, sales force expansion, new digital offerings, and M&A including the completion of the recently announced doc.ai acquisition.

As part of the SPAC IPO deal, Falcon Capital Acquisition Corp., led by Alan Mnuchin, is expected to own approximately 20% of the new company inclusive of the PIPE investors; Mr. Mnuchin, along with Jeff Sagansky, an independent director on Falcon’s board of directors, will join Sharecare’s board of directors. The SPAC IPO is expected to be funded through a combination of Falcon’s $345 million of cash in trust (assuming no redemptions) supported by a $425 million fully committed PIPE at $10.00 per share and the Anthem investment. Anthem will expand its strategic partnership with Sharecare as Sharecare continues the development of products and services to enhance the healthcare experience. Both Sharecare and Falcon plan to donate over $4 million in the surviving company’s stock to Sharecare’s charitable foundation to support well-being initiatives – from global to hyperlocal – that embody the company’s spirit of “sharing care” and demonstrate a commitment to positively impacting community health.

Sharecare Background

Founded in 2010, Sharecare provides the messaging, motivation, management, and measurement tools to help individuals, workforces, and communities optimize their comprehensive well-being. Sharecare’s interoperable virtual care platform is purpose-built to seamlessly connect stakeholders to the health management tools they need to drive engagement, establish sustained participation, increase satisfaction, reduce costs, and improve outcomes. Whether a person’s path to Sharecare originates as an employee, health plan member, patient, community member, or self-motivated individual, Sharecare brings together scientifically validated clinical programs and engaging content to deliver a comprehensive, personalized experience for each user.

Sharecare has a diverse, experienced leadership team with a unique blend of expertise across technology, media, and healthcare. The business is well positioned with a largely recurring revenue model that will drive anticipated 20% sustainable year-over-year growth and gives the business multiple paths to over $1 billion in medium-term revenue. Jeff Arnold, digital health pioneer and founder of WebMD, will continue to lead the company as CEO and chairman.

Jeff Arnold, founder, chairman, and chief executive officer of Sharecare, said, “We started Sharecare to leverage innovations in consumer technology – specifically the smartphone – to create a frictionless experience that engages people across the dynamic continuum of their healthcare needs. By integrating fragmented point solutions and bringing together stakeholders across the healthcare ecosystem into one connected virtual care platform, we believe that Sharecare is uniquely positioned to transform the way people access, providers deliver, and employers and health plans administer high quality, cost efficient healthcare. Strategic partners, Anthem and Digital Alpha, will enable continued innovation in delivering high-impact solutions at scale. We believe Falcon will be invaluable as we pursue this next phase for Sharecare.”

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC acted as financial advisors and King & Spalding LLP acted as legal counsel to Sharecare.

What You Should Know:

– Shares of Signify Health, a value-based care billing platform for in-home and bundled health services jumped more than 33% in its initial public offering (IPO), valuing the company at over $7.12B.

– Today, Signify Health’s CEO Kyle Armbrester will also join the ranks among the youngest CEOs to ever take a company public – notably alongside Bumble’s CEO who also began trading on the NASDAQ today. 

– The company raised 564 million by offering 23.5 million shares at $24, above the upwardly revised range of $20 to $21. The company originally planned to offer 23.5 million shares at $17 to $19 before raising the range on Wednesday. 

– Signify Health will use the proceeds to invest back into the platform, and explore strategic M&A – all with the goal to continue to improve outcomes for patients and their customers.

– Signify Health’s customers include health plans, governments, employers, health systems, and physician groups. Its episode payment platform managed $6.1 billion of spend under the Medicare Bundled Payment for Care Improvement Advanced (BPCI-A) program in 2019, and the BPCI-A episodes it managed initiated in the 4Q19 resulted in approximately 15% greater discharges home from acute-care facilities and approximately 10% lower readmissions. Its mobile network of providers entered over 1 million unique homes to evaluate individuals in Medicare Advantage and other managed care plans in 2019.

– Signify Health plans to list on the NYSE under the symbol SGFY. Goldman Sachs, J.P. Morgan, Barclays, Deutsche Bank, BofA Securities, UBS Investment Bank, Baird, Piper Sandler, and William Blair acted as lead managers on the deal.

What You Should Know:

– Compute Health Acquisition, a SPAC company targeting the intersection of computation and healthcare announced the pricing of its $750M initial public offering (IPO) by offering 75 million units at $10. 

Compute Health Acquisition Corp. (the “Company”), a SPAC “blank check” company announced today that it priced its initial public offering of 75,000,000 units at $10.00 per unit. The units will be listed on The New York Stock Exchange (“NYSE”) and trade under the ticker symbol “CPUH.U” beginning February 5, 2021.

What Is a Special Purpose Acquisition Company (SPAC)?

A special purpose acquisition company (SPAC) known as a “blank check company” is a formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

The company intends to focus on opportunities that are emerging at the intersection of computation and healthcare including data access, artificial intelligence, algorithms and computational power feed to rapidly creating opportunities for new streams of innovation.

Compute Health Acquisition is led by Chairman Omar Ishrak, who currently serves as the Chairman of Intel and previously served as CEO of Medtronic. The leadership team also includes Co-CEO and Director Jean Nehmé, who co-founded Digital Surgery in 2011, and Co-CEO and Director Joshua Fink, who is the Managing Partner of private investment company Ophir Holdings.

Acquisition Strategy

The company intends to acquire companies that lie at the intersection of computation and healthcare, leveraging the power of technological innovation to provide improved efficiency and outcomes, better access to healthcare, and/or streamlines the healthcare pathway. In addition, the company must possess the potential for a leading position in an attractive segment with market growth potential in the hospital and community setting.

What You Should Know:

– Israeli-based G Medical Innovation has withdrawn its plans for an initial public offering (IPO) on Tuesday, Nasdaq first reports.

– The company originally filed an IPO to raise $30 million by offering 5 million shares at a price range of $5 to $7 last month to list on the Nasdaq under the symbol GMVD.

– The recent withdrawal marks the company’s second attempt to go public in the US, previously filing in May 2019 and withdrawing the following August. The company was also previously listed on the ASX (GMV) but recently delisted its shares.

– G Medical Innovations is an early commercial-stage healthcare company developing app-based connected medical devices for vital signs monitoring. The company’s current product offerings include Prizma medical device, a clinical-grade device used to transform smartphones into medical monitoring devices, and Extended Holter Patch System, a multi-channel patient-worn biosensor that captures electrocardiogram data continuously for up to 14 days.

– The company reported $5M in revenue for the 12 months ended June 30, 2020.

With its share price falling from more than $66 to less than $24, September was a tumultuous month for Nanox.

On August 25^th, the medical imaging start-up closed its initial public offering, having raised $190m from the sale of 10,555,556 ordinary shares at a price of $18 each. Money poured in as investors were sold on Nanox’s cold cathode x-ray source and the subsequent reduction in costs that it would enable, as well as the vendor’s pay-per-scan pricing model that would let the company access new, untapped markets.

A week later the shares were being traded for almost double their opening amount, and by the 11^th of September, they had reached a peak of $66.67. This meteoric rise soon came to an end though, as activist short-seller Andrew Left of Citron Research published a report comparing the Israeli start-up to disgraced medical testing firm Theranos and asserted that the company’s shares were worthless.

Other commentators added to Left’s criticism, causing investors to abandon the stock. Class action lawsuits followed, with legal firms hoping to defend shareholders against the imaging company’s alleged fabrication of commercial agreements and of misleading investors.

Nanox defended itself against the Citron attack, insisting that the allegations in the report are ‘completely without merit’, but the extra scrutiny and threat of legal repercussions have left the share price continuing to plummet, falling to $23.52 at month’s end.

Vendor Impact

– New business and payment models could capture demand from new customers in untapped and emerging markets

– Vendors should be reactive. A successful launch of Nanox’s X-ray system could channel more focus and resources on the portfolio of low-end X-ray systems

– Once established, recurring services are hard to displace

– However, brand loyalty and hard-earned reputations aren’t easily forgotten

Market Impact

– Potential for disruptive technology to expand access to medical imaging and provide affordable X-ray digital solutions, delivering a significant and rapid overall market expansion

– New customer bases could have less expertise and a lack of trained professionals – ease of use becomes a critical feature

– Where X-ray system price is a battleground, and a fundamental factor driving purchasing decisions, Nanox’s proposed ecosystem offers revenue-generating opportunities

The Signify View

Assessing the viability and long-term potential of any business is a dangerous game, doubly so if it depends on a closely guarded game-changing technological innovation as is the case with Nanox. Fortunes are won and lost on a daily basis by investors, speculators, and gamblers trying to get in on the ground floor of the next ground-breaking company after being convinced by slick presentations and thorough prospectuses.

There is likely merit in some of the arguments being put forward by those on either side of the Nanox debate. For example, the lack of peer-reviewed journal articles about new technology is questionable. But, the skepticism around the feasibility of Nanox’s technology seems to ignore that research into cold-cathode x-ray generation, the cornerstone of Nanox’s offering has been ongoing for numerous years, and isn’t as out of the blue as the naysayers may suggest.

Regardless of these and other specifics in the ongoing fracas between short-sellers, Nanox, investors, and lawyers, all of whom have their own agendas, the voracity with which the stocks were initially purchased shows the keen appetite investors have for a company that would bring disruption to the X-ray systems market.

When delving into Signify Research’s data on this market, it is easy to see why. Across many developed and mature regions, the market has become relatively stable. It is one of replacement and renewal rather than selling to new customers and increasing the accessibility of X-ray imaging. Developed markets do continue to drive growth for X-ray manufacturers to some extent, particularly as a result of digitalization and favored reimbursement for digital X-ray imaging.  However, by and large, the market remains broadly flat, with a CAGR of just 2.7% forecast for the period 2018-2023.

Figure 1: While there are some growth areas, the X-ray market as a whole is very stable

New business

Nanox has strong ambitions to outperform this underwhelming outlook by utilizing its unique and more affordable technology to offer a relatively feature-rich system, dubbed the Arc, at a far lower price than existing digital X-ray systems. Competing on price is only one part of the equation, however.

After all, there are countries where, despite their economies of scale, the multi-national market leaders in medical imaging are unable to compete with domestic manufacturers, which are able to produce X-ray systems locally, with lower overheads, and no importation costs. Globally, there are also a large number of smaller imaging vendors, which have limited, yet low-cost offerings at the value end of the market, with this increased competition driving down average selling prices.

To differentiate itself further, Nanox also plans to launch with a completely new business model. Instead of traditional transactional sales, which see providers simply purchase and pay the full cost of the imaging system in one installment, use the system for the entire shelf life of the product and then replace with an equivalent model, Nanox plans to retain ownership of its machines, but charge providers to use them on a pay-per-scan basis.

There are some regions and some situations where legislation and other factors make this model unfeasible, so Nanox will also make its products available to purchase outright, as well as licensing its technology to other firms. However, the start-up’s focus is on offering medical imaging as a service.

The company says that this shift from a CapEx to a managed service approach means that instead of competing with established vendors over market share, it will be able to expand the total market, enabling access to imaging systems in settings where they have been hitherto absent, with urgent care units, outpatient clinics, and nursing homes being suggested as targets.

According to the Nanox investor’s prospectus, current contracts already secured (although the legitimacy of these deals is one of the issues raised by the short-sellers) feature a $40 per scan cost, of which Nanox receives $14 – although the exact figure varies depending on regional economics. The contracts feature a minimum service fee equivalent to seven scans a day, although the target is somewhat higher, with each machine expected to be used to produce 20 scans a day, for 23 days a month.

If Nanox’s order book is as valid as the company insists, and it already has deals for 5,150 units in place, each system will consequently be bringing in a minimum of $27,048 dollars per year for a minimum total revenue of $139m. If the systems are used 20 times a day as Nanox hopes, that means almost $400m in sticky recurring revenues annually. To put that in perspective, one of the market leaders for X-ray imaging systems in 2018 was Siemens Healthineers, which turned over almost $2.8bn across its general radiography, fluoroscopy, mammography, mobile, angiography, and CT imaging divisions.

With an order book that is, on the face of it, this healthy, there have been questions as to why Nanox went public at all, but the listing may be required for this business model to work. The Israeli vendor says that the vast majority of the investment will be sunk into producing the Nanox scanners, and the associated manufacturing capacity. This is necessary because unlike other imaging companies selling systems on a CapEx basis, Nanox will receive nothing for delivering scanners to customers. Revenue is generated later as the systems are used.

This means that the company is effectively fronting the initial cost of the systems, so needs to get as many units installed and being used as quickly as possible to recoup its initial costs. Unlike other vendors, it cannot rely on sales of a first tranche to fund the second and so on, in its new managed service model, it is better to mass produce everything at once.

Open to exposure

There is, however, nothing to stop other, established players from switching to a similar model. This should be of concern to Nanox, after all, Siemens Healthineers or GE Healthcare already have the manufacturing capacity and capital ready to offer products in a similar way.

And of course, Nanox, shouldn’t underestimate the difficulty of disrupting a long-established market. Despite ample funding and solid products, other companies are still struggling to make an impact in other markets. For example, Butterfly Network, a vendor offering an affordable handheld ultrasound solution, has a valuation of over $1 billion and has received more than $350m in funding.

In 2019, the company turned over $28m, enough to make it the market leader in the nascent handheld category, but in a global ultrasound market worth almost $7bn, at present, it is little more than a drop in the ocean.

Nanox hopes that its own new business model would be disruptive by opening up the market to a far greater range of customers than are currently served. A nursing home, for example, might not be able or willing to allocate the cost of a CT machine from a single year’s budget, but spreading that cost as the scanner is used, and particularly if that cost is passed on to patients at a time of use, on-site imaging suddenly becomes a far more feasible proposition.

What’s more, if a company was able to increase its product’s user base there is a strong possibility for upselling additional services, software, and tools. These could be things like AI modules that increase workflow efficiency, or, especially pertinent given the pricing model could allow machines to be installed in new settings that lack on-site expertise, tools that aid clinical decision making.

Beyond that, there is also ample scope for an imaging vendor to entice a customer into its ecosystem with a scanner that has no cost at the point of delivery, before getting it to commit to its own PACS and other IT systems. Being able to fully exploit these new customers relies, in the first instance, on being able to get a foot in the door. That is why an imaging service model could be so beneficial, even if the returns on the scans themselves aren’t especially lucrative.

Features first

While adopting a new business model and securing revenue from add-ons and upselling would help established vendors countenance the price differential Nanox proposes, if we are to take the start-up at its word, addressing its feature set might be another matter entirely.

As well as just providing imaging hardware, Nanox is offering a service that, at face value, is more complete. The Arc automatically uploads all imaging data to its cloud SaaS platform. This platform would initially use AI systems to ‘provide first response and decision assistive information’ before radiologists could provide final diagnoses that could then be shared with hospitals in real-time.

Figure 2: With teleradiology read volumes increasing, it makes sense that the necessary hardware comes baked into the Arc

There is currently limited information available about the exact nature of the so-called Nanox.CLOUD and its integration with the Arc, although several assumptions can be made:

– Firstly, although built-in connectivity is being touted as a feature with clinical benefits, its inclusion is as likely to be a necessity as a design choice, given that Nanox presumably needs to be able to communicate with the systems in order to find out scan volumes and bill accordingly. Or, more drastically, render the system inoperable if people don’t keep up with payments.

– Another assumption that can be made is that the full suite of tools wouldn’t be included in the basic pay-per-scan fee. Signify’s Teleradiology World – 2020 report found that in 2020, the average revenue per read for a teleradiology platform is, in North America for example, $24.40. As such, teleradiology services would only be able to be offered at an additional cost, creating another revenue stream for Nanox.

– Another sticking point could also be Nanox’s promise to enable the integration of its cloud into existing medical systems, via APIs. While well and good in theory, the competitiveness, complexity, and proprietary nature of many medical imaging workflows, combined with the fact that many vendors have absolutely no incentive to make integration easy for the newcomer, mean that in practice, it is likely to either be a prohibitively expensive, or frustratingly limited offering. This is one area where established vendors, which already offer comprehensive medical imaging packages, have a distinct advantage.

Back down to Earth

The short positions promoted by commentators including Citron Research and Muddy Waters Research postulate that the Nanox.ARC scanner isn’t real. There are some legitimate questions, but running through their papers is also an attitude that Nanox’s claims are simply implausible, whether that is because it has an R&D budget a fraction of the size of GE, or because anonymous radiologists unrelated to the company haven’t seen anything like it before.

It is worth remembering, though, that these short sellers will benefit financially if Nanox slumps. Nanox conversely, is obviously financially incentivized to promote its technology and its potential, and it wouldn’t be the first company, to promote the limited fruits of its start-up labor in a flattering light.

As so often happens in these he said, she said situations, the truth could well lie somewhere between the two extremes. Even in this instance, even if Nanox fails to deliver on some of its more impressive promises, the fact is, it has suggested bringing a whole new customer base into play and laid out a strategy for selling to them.

With that being the case, for a big vendor the issue of whether Nanox is legitimate almost becomes moot, their focus should be what these other customers require, how to get these customers into their product ecosystems, and what add-on products, and additional services they can feasibly sell them at a later date.

If nothing else, the entire Nanox furor shows that to achieve growth in mature markets, a vendor’s innovation needs to extend beyond its products.

About Alan Stoddart

Alan Stoddart is the Editor at Signify Research, a UK-based market research firm focusing on health IT, digital health, and medical imaging. Alan joined Signify Research in 2020, using his editorial expertise to lead on the company’s insight and analysis services. 

What You Should Know:

– AiCure launches digital biomarker platform to remotely detect subtle changes in a patient’s condition, leverages computer vision and AI to gather and analyze visual and auditory cues directly through the patient’s smartphone camera.

– AiCure appoints Ed Ikeguchi, M.D. as its Chief Executive Officer (CEO) to advance AiCure’s commitment to improving holistic health through an understanding of the science behind human responses to illness and treatment.

AiCure, an AI and advanced data analytics company focused on improving clinical trials, today introduced to the market its digital biomarker platform to remotely detect subtle changes in a patient’s condition. The platform leverages computer vision and AI to gather and analyze visual and auditory cues directly through the patient’s smartphone camera, pinpointing critical patient responses and behavioral trends with the frequency and accuracy needed to elevate the integrity of clinical trial data. By aggregating clinically-sound insights in a patient’s natural environment, AiCure empowers pharmaceutical companies to improve their understanding of disease symptomology, drug dosing side effects, and stratified disease variations, ultimately supporting improved health and trial outcomes.

Eliminating Blind Spots

In any clinical trial, the collection of accurate data of a patient’s response to treatment is critical to understanding the impact a drug actually has on patients. Often, clinical trials require several in-person patient visits where clinicians note any changes in a person’s emotional and physical condition. These visits, which can be burdensome for patients and expensive for trial sponsors, can be infrequent and subjective, especially as patient symptoms may not be visible at the time of the visit. AiCure aims to eliminate these blind spots by creating more frequent check-ins that take place in the comfort of a patient’s home, providing more accurate accounts of a patient’s holistic wellbeing. AiCure’s digital biomarker platform uses a person’s smartphone to ask the patient simple questions or have them complete brief tasks, and then uses AI to analyze behavior, such as response time, affect, physical movement and speech patterns.

For example, many neurological conditions have significant visual symptom indications. AiCure’s platform can be used to measure the severity of facial tremors or eye twitches for a patient with Parkinson’s. This highly sensitive measurement of a patient’s response to treatment advances the validity of trial data when making claims regarding a drug’s impact.

Building on the success of its medication adherence platform, AiCure’s digital biomarker platform:

Captures visual and audio data via a smartphone – AiCure’s portfolio of digital biomarkers measure far more than traditional wearable metrics such as movement trends. Instead, it helps to advance the digital biomarking industry by tracking a variety of metrics simultaneously, including mood, tremors or cognition, to indicate a negative response to treatment. By doing so through an everyday device such as a smartphone, the platform helps to democratize access and participation, and improve the likelihood of ongoing engagement.

Complies with data privacy regulations – The platform offers objective observations of patients and clinical trial participants in their natural environment, while providing HIPAA and GDPR compliant patient data. This allows for medical-grade, secure data capture and processing.

Developed to be scientifically sound and open – AiCure has developed its platform to be transparent and gives pharmaceutical companies open access to its algorithms’ methodologies. Built on validated scientific methodologies in laboratory-based settings, AiCure’s digital biomarker algorithms provide meaningful, clinically sound data that can be submitted to the FDA.

AiCure Appoints Former Medidata Founder Ed Ikeguchi as CEO

In addition to the platform announcement, the company announced Ed Ikeguchi, M.D. as its Chief Executive Officer (CEO). Formerly serving as the company’s Chief Medical Officer (CMO) and President, Dr. Ikeguchi’s appointment as CEO will advance AiCure’s commitment to improving holistic health through an understanding of the science behind human responses to illness and treatment. With today’s announcement of digital biomarkers, AiCure is delivering on this vision.

Prior to joining as AiCure’s CMO in 2018, Dr. Ikeguchi co-founded Medidata Solutions, where he grew the company from its inception to its initial public offering in 2009 while serving as its CEO from 1999-2001 and its CMO from 2001-2009. Dr. Ikeguchi’s extensive experience in both the C-suite and in clinical environments, including his understanding of the many pain points of patient engagement, positions him well to lead the company in its next phase.

Digital health funding reached a new record of $4.2 billion across 180 deals in the first half of 2019, according to Rock Health, a full-service venture fund dedicated to digital health. The digital health sector is on track for an $8.4B year in 2019—and may even break 2018’s annual funding total. The report also validates the continued trend of the large $100M+ mega deals, attributing to 30% of venture funding in H1 2019. The 2019 Midyear Digital Health Market Update reflects a maturing digital health venture investment environment that remains robust and relatively free of froth with signs of a near-term harvest in the IPO market.

2019: The Year of the Digital Health IPO

Livongo, Health Catalyst, Change Healthcare, Phreesia, and Peloton all announced their initial public offering (IPO), marketing them as the first digital health IPOs since 2016. Four of these companies—Livongo, Health Catalyst, Phreesia, and Peloton—raised an average of $425M from private investors totaling $1.7B. M&A Activity continues to dominate the digital health market with a total of 43 acquisitions to date in the first six months of 2019. At this rate, Rock Health projects a total of 86 acquisitions to close out 2019, representing roughly 25% fewer than in recent years.

The report produced by Sean Day with help from Bill Evans, Danielle McGuinness, Megan Zweig, and Natalie Yu sources data from Capital IQ, SEC company websites, Crunchbase, NVCA, press releases, and the Rock Health funding database.

Other key findings from the Rock Health H1 2019 Digital Health Market Update report includes:

– Investors continue to fund startups with B2B business models—87% of funded digital health companies in H1 2019 sell to enterprise—the employers, payers, providers, and others that hold purse strings in US healthcare.

– Long enterprise sales cycles in healthcare aren’t killing early-stage innovation: a higher percentage of pure B2B digital health startups that raised a seed round across 2011-2015 have since raised a subsequent round of funding compared to pure D2C seed-funded companies in the same time period.

– The median size of a Series A digital health deal in 2019 thus far is $10M—up 11% from the $9M median in 2018 and 2X the median Series A in 2011. Series B deals have experienced similar growth—the median $17M in 2019 is 2.1x the median Series B in 2011.

– The average time between funding rounds hovers around 20 months for companies that raised a Seed, Series A, or B in 2014-2016.

– Investors minted three new digital health unicorns in the first half of 2019 (Zipline, Gympass, Hims).

– There have been more repeat investors than new investors in digital health every year since 2016.

– As of July 1, 2019, $36.3B has been invested in 1,274 digital health startups between 2011 and the end of Q2 2019.

Livongo Growth Metrics

Founded in 2014, Livongo offers an integrated suite of solutions to promote sustainable health behavior change based on easy, real-time data capture supported by intuitive devices; insights driven by data science; and a human touch when the member needs it. Livongo’s solutions include diabetes management, hypertension, prediabetes, and weight management, and behavioral health. As of March 31, 2019, Livongo has 679 clients and over 164,000 Livongo for Diabetes members including a number of members enrolled in their hypertension, prediabetes and weight management, and behavioral health solutions.

Livongo Revenue

The company reported $30.9M and $68.4M in revenue for the years ended December 31, 2017, and 2018, respectively, representing a year-over-year growth rate of 122%. Their revenue increased from $12.5M for the three months ended March 31, 2018, to $32.1 million for the three months ended March 31, 2019, representing a year-over-year growth rate of 157%.

In addition, the company incurred net losses of $16.9M and $33.4M for the years ended December 31, 2017, and 2018, respectively. Their net loss also increased from $4.2M for the three months ended March 31, 2018 to $15.0 million for the three months ended March 31, 2019. As of March 31, 2019, Livongo reported an accumulated deficit of $128.6M.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC will serve as lead joint book-running managers for the proposed offering. Piper Jaffray & Co. and SVB Leerink LLC will serve as lead co-managers and Canaccord Genuity LLC, KeyBanc Capital Markets Inc. and Needham & Company, LLC will serve as co-managers for the proposed offering.

Noteworthy News

Amazon, JP Morgan, Berkshire Names New Joint Venture Haven

Amazon, J.P. Morgan, and Berkshire Hathaway name joint venture Haven.
In January 2018, the three founding companies announced plans to create this independent organization, now called Haven, which is free from profit-making incentives and constraints. Haven’s focus is the 1.2 million employees and families affiliated with Amazon, Berkshire Hathaway, and JPMorgan Chase across the United States and over time it intends to share what it learns to help others. 

HIMSS Writes New Definition of Interoperability

HIMSS defines Interoperability as the ability of different information systems, devices or applications to connect, in a coordinated manner, within and across organizational boundaries to access, exchange and cooperatively use data amongst stakeholders, with the goal of optimizing the health of individuals and populations.

Stanford Releases Preliminary Results from Apple Heart Study

Stanford Medicine researchers released preliminary results of the Apple Heart Study, the largest study ever of its kind, which enrolled over 400,000 participants from all 50 states in a span of only eight months.

U of Michigan Launches 3-Year Health Data Collection Study Using Apple Watch

The study called MIPACT (Michigan Predictive Activity and Clinical Trajectories), is already underway, with 1,000 participants enrolled with plans to enroll thousands more patients from its academic medical center over the next year. Participants will be asked to complete surveys while using an Apple Watch and a blood pressure monitor for researchers to better understand their overall health and level of activity.

FDA Chief Steps Down

Food and Drug Commissioner Scott Gottlieb announces his resignation to focus on his family. Gottlieb had been subject to increasing pressure from some Republicans in Congress and others in the conservative moment for his strong stance against youth vaping and traditional cigarettes

Epic Suspends App Orchard

In December 2018, Epic temporarily froze enrollment in the Epic App Orchard Marketplace due to security and privacy concerns with some third-party developers.

Mount Sinai Opens $15M Digital Health Institute

Hasso Plattner Institute for Digital Health at Mount Sinai launches with the goal to develop digital health products with real-time predictive and preventive capabilities that empower patients and health care providers and improve health and health outcomes. 

UPS Will Use Drones to Deliver Medical Samples in North Carolina

UPS has announced a landmark new logistics service to deliver medical samples via unmanned medical drones through a collaboration with autonomous drone technology provider Matternet. The medical drone program will take place at WakeMed’s flagship hospital and campus in the Raleigh, N.C., metropolitan area, with oversight by the Federal Aviation Administration and North Carolina Department of Transportation. 

Cleveland Clinic Launches New Center for AI

Cleveland Clinic launches a new center for artificial intelligence that aims to further collaboration and communication between physicians, researchers and data scientists as AI and machine learning efforts evolve and gain traction across the health system.

Providence Health Digital Unit Confirms Layoffs & Addresses Toxic Culture

Providence confirms that 12 people were let go last November and additional nine were laid off in January. 

Healthcare IT Mergers & Acquisitions (M&A) Activity

Philips Acquires Carestream’s Health IT Business

Royal Philips acquires Carestream Health’shealthcare information systems (HCIS) business unit. Carestream’s HCISbusiness unit includes enterprise imaging IT solutions for multi-site hospitals, radiology services providers, imaging centers and specialty medical clinics. The acquisition of Carestream’s enterprise imaging platform will help expand Philips’ healthcare IT business portfolio of VNA, diagnostic and enterprise viewers, multimedia reporting, workflow orchestrator and clinical, operational and business analytics tools.

Hil-Rom Acquires Mobile Communications Platform Voalte for $180M

Hill-Rom Holdings, Inc. acquires Voalte, a Sarasota, FL-based real-time, mobile healthcare communications for $180 million in cash and up to an additional $15 million in payments related to the achievement of certain commercial milestones. For the Hill-Rom, the acquisition will accelerate its capabilities in clinical communication.

Teladoc Acquires French Telemedicine Provider Medicin Direct

Virtual care provider Teladoc Health acquires Paris, France-based telemedicine provider MédecinDirect to offer its full continuum of services to insurers and employers in Europe’s third largest market. As part of the acquisition, MédecinDirect will become the French country unit of Teladoc Health, adding to existing operations in the U.K., Australia, Canada, Spain, Portugal, Hungary, China, Chile, and Brazil. 

Guardant Health Acquires Cancer Diagnostics Company Bellwether Bio

Precision oncology company Guardant Health,acquires Seattle-based Bellwether Bio, an oncology startup developing next-generation cancer diagnostics using cell-free DNA. The Bellwether Bio team will join Guardant Health to further advance its liquid biopsy-based detection product pipeline that was launched in 2014. 

AbleTo Acquires Digital Therapy App Joyable to Strengthen Virtual Behavioral Healthcare

AbleTo, Inc., a provider of virtual behavioral healthcare proven to improve clinical outcomes and lower healthcare costs acquires Joyable, an app-based digital therapy innovator. The acquisition strengthens AbleTo’s high-quality virtual behavioral healthcare with a digital platform that delivers clinically-based therapies supported by coaches to help individuals overcome depression, generalized anxiety, and social anxiety.

Signify Health Acquires Tav Health

Signify Health, a provider of technology-enabled, in-home care and complex care management services announced acquires TAVHealth, a platform for collaborating with risk-bearing and community-based organizations to address social determinants of health (SDOH). The acquisition of TAVHealth adds a curated network of community-based organizations and the technology capabilities for Signify to directly manage these SDOH needs on behalf of its clients, creating a closed loop between identification of SDOH needs, enrollment into SDOH programs, and coordination of services to better manage and improve health outcomes for members.

Health IT IPOs

Change Healthcare Files for $100M IPO

Change Healthcare has filed a prospectus with the Securities and Exchange Commission (SEC) for a $100 million initial public offering (IPO). The company plans to be listed on the Nasdaq Exchange under the trading symbol “CHNG.”

Health Catalyst Hires Banks for IPO

Health Catalyst has hired Goldman Sachs and JPMorgan to lead the IPO process. The company raised $100 million in Series F equity and debt funding led by OrbiMed, valuing the company at over $1B. Health Catalyst Health Catalyst’s data warehouse and application development platform powered by data from more than 100 million patients and efficiency and lower costs for organizations ranging from the largest US health system to forward-thinking physician practices. 

Livongo Health Prepares for $1B IPO Later This Year

Livongo Health has hired Morgan Stanley, Goldman Sachs and J.P. Morgan Chase to underwrite the IPO, valuing the company at more than $1 billion, according to sources familiar with the dealings. Livongo provides cloud-based glucose monitoring to diabetics via employer-based health plans.

Health IT Public Company Performance

Healthcare Growth Partners, an investment banking & strategic advisory firm exclusively focused on the transformational Health IT market tracks stock indices for publicly traded health IT companies within four different sectors – Health IT, Payers, Healthcare Services, and Health IT & Payer Services. The chart below summarizes the performance of these sectors compared to the S&P 500 for the month of March:

The following tables include summary statistics on the four sectors tracked by HGP as well as the S&P 500 and NASDAQ for March 2019:

Revenue cycle management company Change Healthcare has filed a prospectus with the Securities and Exchange Commission (SEC) for a $100 million initial public offering (IPO). The company plans to be listed on the Nasdaq Exchange under the trading symbol “CHNG.”

Founded in 2005, the Nashville-based company provides data and analytics-driven solutions to improve clinical, financial and patient engagement outcomes through its suite of comprehensive suite of software, analytics, technology-enabled services, and network solutions. According to the SEC filing, Change Healthcare has not yet determined the number of shares it will offer and the price range of the offering. For the year the ended March 31, 2018, Change Healthcare reported $3B in revenue, of which 87% was recurring revenue, net income of $192.4M, Adjusted EBITDA of $943.8M and Adjusted Net Income of $449.7M.

Barclays, Goldman Sachs and J.P. Morgan are the joint underwriters on the IPO deal.