More insanity on health care valuations. City Block builds primary care clinics in urban areas. It just raised $400 million in new capital, with a valuation of almost $6 billion, in what is now a very competitive market among well-financed companies.
Milliman is a large, respected health care actuarial firm. They are acquiring SkySail Rx, which will add greater pharmacy data and analytics capability.
The health care M & A madness continues with genetic testing company Ivitae buying Citizens Health, which organizes medical records, for an astounding $325 million. This supposedly will allow for better integration of genetic information.
More health care company valuation insanity. Ginger, a mental telehealth company, spices up its offerings by merging with Headspace, which offers a meditation app. Ginger's management should have meditated on this deal a bit more. The merged company is supposedly valued at $3 billion, for a company that claims to have $300 million in bookings, whatever that means. The only reason people invest in this kind of garbage is they don't know what else to do with their capital and they believe in the greater fool theory--they can sell to someone else before people figure out what a dud they have.
Carbon Health is going to burn investors to a crisp, acquiring two urgent care chains in recent days. The company raised a lot of funding and is splashing it out there. It wants to be the country's biggest primary care provider. Investors are likely to need mental health care in the next few years.
The insanity continues in venture funding. Maven raised another $110 million, and has a billion dollar valuation, for its telehealth business for maternity health. It is crazy to imagine you will get a return on what is essentially a commodity offering.
A few years ago several very large employers, including Amazon, Bershire and JP Morgan were going to revolutionize employee health benefits with a company called Haven. Went nowhere and disappeared. JP Morgan picked up the remnants and has started a division called Morgan Health. That firm just made a $50 million investment in Vera Health, yet another company that intends to build a series of primary care focused clinics.
Cricket Health offers a kidney disease management service. It just raised an additional $83 million in capital. I am telling y0u the capital markets are off the rails in valuations and throwing money around. All prompted by the government.
Amwell, a telehealth company which went public recently, is following the well-trod path to try to convince investors it has a business which justifies the valuation by buying two other companies with iffy futures. One is Conversa Health, which helps providers with health messaging and visits, and the other is SilverCloud health, which does virtual mental health visits. To show you how desperate these newly public companies are, Amwell is paying $320 million for businesses which have a combined $15 million in revenue this year. That's right, lets pay over 20 times revenue.
Clinical research organizations help drug companies do the trials to get approval for new products or new indications for existing products, and some help with commercialization services. As with many businesses, the larger ones have tended to cycle between being public companies and being owned by private equity firms. Parexel is one of those firms and is being sold by one PE firm to another one for $8.5 billion.
Olive (is it a vegetable or isn't it?), which offers data analytic services for hospitals and health systems, with a focus on AI, raises another $400 million. The company has raised over $900 million in capital in total and is valued at close to $2 billion. Froth, froth, froth.
Paceline raises a fresh $29.5 million in financing to support the 400th company supposedly helping consumers get more engaged in their health and wellness. Great return coming for those investors, not.
More indications of M & A froth. Health Catalyst, a database and analytics firm, is buying Twistle, which offers patient engagement software, for $104 million. Health Catalyst, which has generally floundered since going public, and still loses lots of money, clearly is trying to find some way to add sizzle to its business.
In a sign that perhaps the capital markets for health care payers and services may return to some semblance of sanity, Bright Health, an insurer and manager of provider networks, went public at around $18 a share, well below the pricing range it was seeking, and in a truly bad sign, declined in price by the end of the day. Similar experience to Oscar Health, which went public earlier this year. These new insurers have to compete with monsters like UnitedHealth, Aetna, Cigna and Anthem, and they will struggle to ever make money that justifies their share price.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at khroche@healthy-skeptic.com.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at khroche@healthy-skeptic.com.
Apple Podcasts
Google Podcasts
Spotify
Overcast
PocketCasts
Radio Public
Stitcher
Anchor
RSS - Posts