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#HealthTechDeals Episode 9: Signify buys Caravan; Koneksa; Jasper; Vynca; Doximity

Jess & I are worried about Peleton’s CEO! Well that not worried. Signify Health buys Caravan Health for $250m ; Koneksa gets $45m; Jasper Health gets $25m; $30m for Vynca; & Doximity pays $82.5m for scheduling co Amion, while going gangbusters on its numbers. Matthew Holt

TRANSCRIPT

Jessica DaMassa:

Matthew Holt, you and our loyal listeners might recall how a few weeks ago I bring up the fact that no one is talking about Peloton and the fact that it’s killing TV characters left and right. Then what happens all of a sudden? Boom! Take out of Peloton. The stock has tanked. The CEO is gone. Thousands of people laid off. Am I the harboror of terrible things that are yet to come? It’s this episode, the February 10th episode of Health Tech Deals.

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#HealthTechDeals Episode 08: M&A special! ThirtyMadison & Nurx, Concerto Care, Kindbody, Calm, Withings all at it!

Will Jessica stop laughing? Will we get the intro right? Who knows! 2022 is a big M&A year and this episode is no exception: ThirtyMadison and Nurx have merged, combined they have $300 million in revenue; Concerto Care acquires Crown Health; Kindbody buys Vios Fertility Institute; Calm merges with Ripple Health; Withings buys 8Fit.

-By Matthew Holt

TRANSCRIPT

Jessica DaMassa:

I can’t.

Matthew Holt:

I’ll start.

Jessica DaMassa:

No, you can’t start.

Matthew Holt:

Welcome to Health Tech Deals. The show where Jessica DaMassa normally does this part, but she’s can’t because she’s laughing too much. It must be February the 9th, 2022 edition. Possibly? Yes? Maybe? I don’t know. Maybe Jessica will stop laughing after the break.

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Does Digital Health Technology Have a “Famous Trio” in the Making?

By MIKE MAGEE

Yale historian, Frank M. Snowden wisely notes in his 2020 book, “Epidemics and Society”, that “We must avoid the pitfall of believing the driver of scientific knowledge is ever a single genius working alone.”

His insight came to mind this week as I was reviewing the January 11, 2020 Forbes article by Seth Joseph, health tech policy correspondent, titled “What Bubble? Digital Health Funding Year in Review 2021.”

By one measure of success – dollars invested – it’s been a banner year. According to Joseph, there was over $29 billion funded, and 729 digital health US-based startups in 2021. But according to Scott Barclay, Managing Director at Insight Partners, who is quoted generously in the Forbes piece, “digital health is still in its relative infancy.”

This level of churn, passion, and (some might say) financial frenzy is reminiscent of another moment in scientific history – the latter half of the 19th century. Over a few decades, “The Germ Theory” was fleshed out with unprecedented and remarkable human progress following in its wake.

The breakthroughs were not the result of 729 often-repetitive and unoriginal ideas, but rather the work of three successive innovators whose work built on each other, combining innovation, technology and health.

Snowden termed the three “The Famous Trio.”

The first was Louis Pasteur (1822-1895) a chemist with a sharp eye and mind. He had been hired to find a solution for wine and milk that was spoiling too fast. The tools he wielded were mostly observational, including a still primitive microscope. With it, Pasteur was able to identify putrefying microbes as causal but went two steps further. He noted that a heating process killed the microbes and halted the product putrefaction, and tied the microscopic organisms to specific human diseases. With this knowledge, he unveiled a commercial process of serial attenuation of disease-causing microbes that allowed safe inoculation of humans and acquired immunity.

The second of the trio was Robert Koch (1834-1910), a physician 20 years younger than Pasteur. While studying Anthrax at the University of Gottingen, he visualized the large causative bacteria, introduced it into a lab animal, and reproduced the disease. Going one step further, he described resistant spores of the bacteria, identified them in grazing fields, and proved that eating grass laden with spores could spread Anthrax between animals. His careful investigative approach led to the uncovering of the etiology of tuberculosis and to “Koch’s Postulates”, four steps still in place today, which when followed, constitute laboratory-based scientific proof of a theory. Beyond this, Koch was a technology innovator, teaming up with the Carl Zeiss optical company, whose lenses, in combination with specialized tissue stains and fixed culture mediums, allowed Koch to visualize and describe M. tuberculosis.

The third innovator was Joseph Lister (1827-1912), a professor of surgery at Edinburgh.  Thanks to the development of ether and nitrous oxide in the 1840s, pain management intra-operatively was under partial control. Improving techniques and tools helped control blood loss. But post-operative infection remained a persistent and deadly threat. Viewing the work of Pasteur and Koch, Lister recognized the possibility that contamination with microbes might be the cause. In carefully designed studies, employing hand scrubbing, sterilization of tools, and spraying the patient with carbolic acid, rates of post-operative sepsis declined. Other colleagues added sterile gowns, gloves, and masks, merging these added measures with Lister’s support.

 Arguably, the life-saving “Germ Theory” was the work product of complementary insights and serial incremental progress. It might then be reasonable to ask, of the $29 billion funded 729 digital health tech US-based startups in 2021, how many represent additive and progressive insights that might eventually lead to game-changing advances in the health of America?

Scott Barclay appears to be mining this same territory. In Forbes, he says, “The green shoots of the past 10 years are turning into new vibrant ecosystems that are growing, but young. We are early in what may turn out to be a two-decade epoch of super innovative ideas, strong founders with execution experience bringing change to a $4T sector of the economy that has been sclerotic and in many parts oligopolistic. The majority of the largest digital health companies in 2040 public markets have not yet been started.”

Does Digital Health Technology have a “Famous Trio” in the making to link infrastructure, AI diagnostics, and evidence-based health? Who are they, and how do they complement each other?

Mike Magee, MD is a Medical Historian and Health Economist, and author of  “CodeBlue: Inside the Medical Industrial Complex.“

Komodo Health: Chan Zuckerberg Initiative Partnership, Rare Disease Patients, and… IPO Rumors?

By JESSICA DaMASSA, WTF HEALTH

Komodo Health has been catching lots of buzz lately thanks to a recently announced partnership with the Chan Zuckerberg Initiative’s Rare as One Network AND some chatter about a possible upcoming IPO that seems to have come from its own CEO Arif Nathoo. To check what’s true and what’s false, we sat down with Komodo’s President, Web Sun.

What did we learn? Well… a lot. The core of both the CZI partnership and the future of Komodo’s business is their Healthcare Map, which Web says draws together the data of more patients (300M+), across a longer period of time (as long as 6-years for some cohorts) than anyone else in the industry. But, this comprehensive, longitudinal view of the patient journey is only part of Komodo’s usefulness – the other part is how they use that dataset to surface insights.

As Web talks about how all this will manifest itself in the context of rare diseases to benefit the patients who belong to the 60 different advocacy organizations that will now have access to Komodo thanks to the CZI partnership, it’s not only easy to understand how comprehensive data can help rare disease patients, but how this is a metaphor for helping all patients across all manner of healthcare. Shortening the diagnostic journey, better understanding symptom patterns and comorbidities, matching patients to specialists highly experienced and adept at managing their conditions, quickly bridging connections to novel therapies and clinical trial opportunities… how beautiful that this will be offered to patients who need it most. The market potential, however, lies in how it will be scaled-up-and-out to the rest of us – which brings us back to those exit rumors! Tune in to hear what Web has to say about his co-founder’s comments, and how he believes Komodo is differentiated from other big data businesses in the analytics space.

Take a Tip from Domino’s

By KIM BELLARD

If you’re already thinking ahead to next Sunday’s Super Bowl, you might be thinking about Domino’s, because, as everyone knows, pizza and football go together like mom and apple pie.  I’m thinking about Domino’s too, but not because I’m planning my order.  It’s about their new program to reward customers who do more of their own work.  

Ahem, healthcare: pay attention.

Last week Domino’s announced that customers who picked up their own orders, rather than using delivery, would earn a $3 tip.  Art D’Elia, Domino’s executive president and chief marketing officer, explained: 

It takes skill to get pizza from a Domino’s store to your door. As a reward, Domino’s is giving a $3 tip to online carryout customers who take the time and energy out of their day to act as their own delivery drivers. After all, we think they deserve it. 

The program – Domino’s Carryout Tips – isn’t quite as rewarding as it might sound.  The $3 is actually a credit on your next order, and that credit has to be used by the following week.  There’s a $5 minimum to qualify, and orders have to be online.  The program was announced in time for the expected Super Bowl surge and is scheduled to end May 22.  

But still.  I don’t like waiting for deliveries, I do like pizza, and if I ordered a lot of Domino’s (which I don’t), the $3 tip would be decent discount, even if I had to order even more Domino’s to actually get it.

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Ecology and Technical Advance

By MIKE MAGEE

It is fair to say that the vast majority of Americans know more about viruses today than they did 24 months ago. The death and destruction in the wake of COVID-19 and its progeny have been a powerful motivator. Fear and worry tend to focus one’s attention.

Our collective learnings are evolving. We have already seen historic comparisons to other epidemics. Just search “The 10 worst epidemics” for confirmation. But one critical area which has been skimmed over, and only delicately probed (if at all) is the ecology or “the ecological point of view.”

For those interested, let me recommend “Natural History of Infectious Disease” published in 1972 by Nobel laureate and Australian biologist Sir Macfarlane Burnet and his colleague David O. White.

Chapter 1 begins: “In the final third of the twentieth century, we of the affluent West are confronted with no lack of environmental, social, and political problems, but one of the immemorial hazards of human existence is gone. Young people today have had almost no experience of serious infectious disease…For the first time in history deaths in infancy and childhood are not predominantly from infection.” But a few sentences on, they add this addendum, “Infectious diseases may be almost invisible, but it is still potentially as important as ever it was.”

Americans are all too familiar with the living biologic organism named COVID-19. By now, they know what it looks like, the role of its outer spikes, its nuclear makeup, and genetic alterations that allow the creation of derivative variants and vaccines. But in addition to its biological science, it also has an ecological life as well.

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Meet Teen Mental Health App BeMe Health & Their “TikTok” Type Approach to Behavioral Health Care

By JESSICA DaMASSA, WTF HEALTH

Teen mental health has hit crisis-level concern these days, and seed-funded startup BeMe Health is hoping to help with a digital mental health app purpose-built just for teens. Fast Company labeled the app as “TikTok for teen mental health,” which is a spot-on description of its exciting, social-media-like look and feel, but a bit of an undersell of the evidence-backed behavioral health care the app is actually providing.

Co-founders Nicki Tessler and Mandeep Dhillon introduce us to BeMe, and tell us why they believe the TikTok-like approach they’re taking – with its emphasis on short, engaging video content that’s “served up” rather than “sought out” thanks to smart algorithms that link mental health goals with in-app behavior and engagement patterns – is key to winning the buy-in of digitally-native teens.

While apps like Instagram, Facebook, and TikTok have lately received criticism for their role in harming teens’ mental health with algorithms that drive content consumption to increase ad revenue, BeMe is hoping to use those same tactics to drive content consumption that will increase a teen’s ability to manage stress, learn coping skills, build resilience, identify their emotions, and even help coach one another.

Beyond product design and market fit (winning teens is not enough, parents need a place in this too) Nicki and Mandeep also talk us through BeMe’s business model, which is evolving along with the app’s development. The startup’s $7 million dollar seed funding is “connected” to payers – nine of the top 10 health plans, says Nicki – and so the initial strategy is based on a per-member-per-month model and will be launching in coordination with pediatricians and therapists, as well as with schools, before it goes direct-to-consumer. Still the question remains: If mom, dad, or the doc recommends it, will a discerning teen really will want to do? Listen in to find out if BeMe’s sticky videos, teen advisory board, and algorithms sound like they’ll bridge the generation gap and start shaping a different kind of mental health care for this important phase of life.

After the Crash

By JEFF GOLDSMITH

These are grim days for innovative healthcare companies.  The health tech and care innovation firms mature enough to make it to public markets have been eviscerated in the ongoing market correction. As of January 29, 2022, high fliers like One Medical (down 83% from peak), Oscar (down 83%), Bright Healthcare (down 85%), Teladoc (down 77% but still selling at 6X revenues!), and AmWell (down 90%) are the tip of a much larger melting iceberg.    The dozens of digital health unicorns (e.g. pre-public companies valued at more than $1 billion) and their less mythical brethren, into which investors poured more than $45 billion during 2020-2021, are sheltering in the comparative safety of VC/Private Equity balance sheets. They are protected from investor wrath until those firms’ limited partners force a revaluation of their portfolios based on the market value of their publicly traded comparables.   

Yet it is the next moves that these innovative firms and their equity holders make that will determine whether these firms realize their full transformative potential or fade into insignificance. The Gartner Group, which tracks the technology industry generally, popularized the notion of the Hype Cycle- a seemingly universal trajectory that tech innovations and the firms that produce them follow (see below).   

                                                    The Gartner Hype Cycle

Everyone seems to focus on the colorful first phase of this cycle- the inflating and deflating part- where an innovation rises on a wave of the adulatory press (and breathless futurist punditry), then crashes ignominiously into the Slough of Despond.  A classic example was the Apple iPhone’s ill-starred great uncle, the Apple Newton, which launched in 1993 and crashed shortly thereafter.

For founders and investors, as well as customers, however, it is the less visible succeeding phases that determine if the innovation survives and the firms that produce them become ubiquitous and indispensable parts of our lives.  The rising initial phase of Gartner’s Hype Cycle is driven by the question “Is it cool”?, mediated by hyperactive media and Internet buzz.    The inevitable crash, on the other hand, is almost always driven by the troublesome real-world question,  “Does the product actually work as advertised?” Analysts, writers, and, most importantly, customers press uncomfortable questions about not only functionality, but also reliability, affordability, stickiness, and “value for money”.

How do firms survive the crash and climb Gartner’s “Slope of Enlightenment”?  This is the unglamorous “pick and shovel” part.  If the sticky “product integrity” issues (does the product actually work?) are resolved, then a host of important questions challenge the firm, its founders, and owners, which answers the crucial question:  whether it is a real business:   

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#HealthTechDeals Episode 7: League, Reimagine Care, Resilience, Mantra Health, Physician Partners

It’s Groundhog Day and I have emerged from my little hole in the ground to let you know my predictions for funding this year for Health Tech companies! League raises $95 million; Reimagine Care raises $25 million; Resilience raises 40 euros; Mantra Health raises $22 million, and Physician Partners raises $500 million. Oh and Akili is going to SPAC, maybe -Matthew Holt

Transcript:

Jessica DaMassa:

Well, it’s Groundhog Day, and that can only mean one thing. Matthew Holt has emerged from his little hole in the ground to let us know what his prediction is for more funding in this next year for health tech companies. Will he see his shadow and be scared back into the hall? It looks like it. It’s the February 2nd episode of Health Tech Deals.

Matthew Holt:

All right. Jessica, Jessica, Jess. I know I’ve seen the movie, but I don’t understand it. If the groundhog sees his shadow because the sun is up, there’s more winter?

Jessica DaMassa:

Yes.

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#HealthTechDeals Episode 6: Alto Pharmacy, Althelas, A Place for Mom, And Summus Global

In Episode 6 of Health Tech Deals, Jess and I might be two new characters and Sesame Street! Keep watching to find out which ones. Some new deals, brought to you by the letter A: Alto Pharmacy raises $200 million; Athelas raises $132 million; A Place for Mom raises $175 million; and Summus Global raises $22 million. -Matthew Holt

Jessica DaMassa:              Well, hello, Matthew Holt. I have an important question for you. It looks like all of the deals we have to talk about today start with the letter ‘a’, which leads me to believe that we might be two new characters on Sesame Street. Now, are we more like Ernie and Bert or Oscar the Grouch and Big Bird? Those are the important questions that we’re asking here on the February 2nd episode of “Health Tech Deals”.

Matthew Holt:                   So Jessica. I’m very tall, so I must be Big Bird, and you must be Oscar the Grouch.

Jessica DaMassa:              Don’t think so.

Matthew Holt:                   All right? Maybe the other way. Anyway, it’s all brought to you by the letter ‘a’.

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