Category: Digital Health

MindMaze Raises $105M for XR Neurorehab

Posted on by Jason Barry

What do you do if you’re an innovative digital therapeutics startup that recently raised $125M in October? If you’re MindMaze, you follow it up with another $105M to “supercharge” growth even further.

  • MindMaze develops mixed reality digital therapeutics that help patients recover from neurodegenerative diseases and brain injuries. The company combines AI-enabled software with hardware peripherals to produce immersive VR/AR experiences.
  • The FDA-approved platform would fit in a sci-fi novel just as well as in the hospitals currently using it. MindMaze’s solutions use wearables to sense a patient’s brainwaves and muscle activity while a proprietary motion capture camera system helps predict movements before they’re made.
  • As an example, a movement impaired stroke patient equipped with the MindMaze platform could attempt to move their hand and see a normal motion response in VR, which helps the brain create new neural pathways and regain real-world motor control.
  • These exercises are then gamified into situations such as driving a racecar to improve engagement and encourage patients to follow a recovery regime without constant touchpoints with a dedicated therapist. 

Solutions Follow Coverage

In its funding announcement, MindMaze called the latest CPT III codes for asynchronous physical therapy “a tremendous milestone” that allow new products to be brought to market. The referenced code (0733T) was issued in December for remote body and limb kinematic measurement-based therapy, widening the path to reimbursement for in-home solutions like the ones provided by MindMaze.

The regulatory support and fresh funding will be used to advance commercialization in the US through a partnership with the American Hospital Association that expands MindMaze’s footprint in neurorehabilitation centers while fast tracking its pipeline, which includes three new therapeutics for chronic stroke, Parkinson’s Disease, and age-related cognitive impairment.

Doximity Adds Physician Scheduling With Amion Acquisition

Posted on by Jason Barry

Healthcare networking platform Doximity is expanding beyond its role as “the LinkedIn for doctors” with the announcement that it is acquiring on-call physician scheduling app Amion for $53.5M.

  • Amion adds a key component to Doximity’s physician cloud services by integrating scheduling into its existing suite of messaging, referral, and telehealth tools.
  • Doximity has over a million doctors as verified members, ranking it among the largest networks of healthcare professionals in the US.
  • The company went public last year at a valuation of $7B and has since found success with its strategy of cultivating a community of medical workers that it can then offer tools to in order to improve their day-to-day workflows.
  • In its recent conference call with investors, Doximity revealed that its revenue climbed 67% year-over-year to $97.9M, netting a healthy pre-tax earnings of $47M.

The Takeaway

Doximity CEO Jeff Tangney stated that the Amion move was primarily a product acquisition for the company, adding a valuable subscription business that manages over 200k physician schedules across thousands of hospitals.

By expanding Doximity’s roster of collaboration products, Amion’s scheduling tools have the potential to improve engagement across its acquirer’s entire network.

Signify Health Acquires Caravan for $300M

Posted on by Jason Barry

Signify Health is celebrating the one year anniversary of its IPO with style. The value-based care platform is acquiring Caravan Health for a lofty total of $250M, with another $50M set aside for future performance incentives. 

Upon closing, Signify will have one of the largest networks of providers engaged in risk-based contracts in the US, reaching over 3,200 health systems and covering more than 500k lives.

  • Signify’s technology platform and nationwide physician network help payors and providers develop value-based care programs and shift health services to the home.
  • Caravan enables accountable care organizations (ACOs) to excel in population health management and commercial risk arrangements, focusing primarily on medically underserved patients.
  • Signify’s mobile physician network and at-home services are well-positioned to assist Caravan’s ACO partners with improving access to care by extending the resources of local care teams.

Why It Makes Sense

Combining Caravan’s population-level insights with Signify’s at-home services creates an “end-to-end suite” of value-based care enablement, allowing organizations to manage larger populations while improving care coordination beyond traditional clinical environments. 

To top it off, Signify can also leverage its payor relationships and post-acquisition scale to improve provider participation in value-based care programs by increasing the percentage of patients in a provider’s panel that are covered by the arrangements.

League Raises $95M To Scale Health OS

Posted on by Jason Barry

Healthcare navigation platform League recently completed a $95M Series C round to support the scaling of its Health OS platform-as-a-service solution, which aims to be the digital infrastructure for an integrated health ecosystem.

  • Health OS enables payors, providers, and employers to build their own comprehensive healthcare consumer experiences with a secure and interoperable foundation. 
  • The platform is built on the FHIR standard and leverages the Google Cloud Healthcare API to tie together data from EHRs, wearables, and third-party partners to create personalized “digital front doors” for patients.
  • League reports that hundreds of companies ranging from Humana to Shopify have adopted Health OS to ensure employees can quickly access the services that they need, helping them to feel supported in managing their health while performing at their best.
  • The company attributes its success to the fact that it allows its clients to keep up with rising consumer expectations for healthcare convenience without having to invest the labor and resources to create a homegrown solution.

IPO Rumors

The latest raise pushed League’s total funding to $205M, and the announcement seems to hint that future funding could come from the public markets. The round’s lead investor, TDM Growth Partners, stated that it understands “the scaling journey of pre-IPO companies and what it takes to transition them successfully to the public markets.”

Although no timeline was given for an IPO, TDM made similar investments in AllBirds and Slack less than a year prior to them going public, so it wouldn’t be too surprising if League was following a similar tempo.

Akili Interactive Goes Public in $1B SPAC Merger

Posted on by Jason Barry

It’s less than a month into the new year and the first major digital health SPAC merger of 2022 has arrived. Digital therapeutic company Akili Interactive announced plans to go public in a merger with Social Capital Suvretta Holdings Corp, a SPAC run by high profile venture capitalist Chamath Palihapitiya. 

The transaction values Akili at approximately $1B and is structured to provide over $400M in new capital after it closes in mid-2022, after which the company will be listed on the Nasdaq under the ticker symbol AKLI.

  • Akili develops video games designed to address cognitive impairments in patients. The games actively adapt to each player’s abilities to deliver individualized regimens for building attention control.
  • EndeavorRx is the company’s flagship product targeted at treating ADHD in children by requiring them to manage multiple tasks simultaneously while navigating a character through complex levels. It became the first FDA approved video game in June 2020.
  • The proceeds from the merger will support the commercial launch of EndeavorRx later this year and help to expand Akili’s digital therapeutic pipeline to other cognitive impairments such as depression, autism spectrum disorder, and multiple sclerosis.

Industry Impact

SPAC enthusiasm is clearly alive and well, often chosen for the structure’s ability to take companies public quickly while avoiding much of the volatility associated with traditional IPOs. Last year saw a record 23 digital health companies go public, 8 through IPOs and 15 through SPAC mergers, including another DTx-developer Pear Therapeutics.

Prior to its public listing, Akili raised $301M in funding while projecting that the US market for its ADHD solution could generate $500M by 2030, a potentially rosy forecast given that EndeavorRx has yet to be made commercially available.

The public markets have not been very kind to pre-revenue healthcare companies so far this year, but the FDA and investors both seem to agree that Akili’s fresh approach to video game-styled therapeutics offers significant potential.

UnitedHealth’s Business is Booming Heading Into 2022

Posted on by Jason Barry

Last week, UnitedHealth Group (UHG) reported its full-year financial results for 2021, defending its title as the most profitable US healthcare company while serving as the earnings season bellwether for the broader industry.

Between its UnitedHealthcare payor operations and its Optum hybrid care service lines, UnitedHealth Group pulled in $287.6B in revenue for the year (up 11.8%), beating their initial projections by about $10B.

UnitedHealthcare is the nation’s largest commercial payor, and the company spent a lot of time in its conference call highlighting its success in Medicare Advantage (MA).

  • UHG leads the MA space with 7.9M members, adding 800M in 2021 alone. Over the past year, total MA plan enrollment grew 8.8% to 28.5M beneficiaries, meaning that UHG accounted for nearly 1 in 3 new members – a huge revenue boost from the government at $1,000/patient/month.

Optum’s fast-growing health services business was no less impressive, serving 100M people at year end 2021 while growing revenue per consumer by 33% as it expanded the reach of its value-based care arrangements.

  • UHG spent $100M in 2021 helping partners prepare for value-based contracts. This investment was divided between three primary work streams (clinician training, tech enhancements, network coordination), with similar investments expected this year.

The Forecast for 2022

Looking ahead to the rest of 2022, it’s difficult to forecast a scenario where UHG doesn’t continue its momentum. In the past few months the company’s expansion has only accelerated, with UnitedHealthcare debuting a virtual-first health plan NavigateNOW and Optum moving into the direct-to-consumer pharmacy arena.

UNG expects its 2022 revenue to grow roughly 10%, falling between $317B and $320B, and there’s even a kicker. That projection doesn’t include any gains from the pending acquisition of Change Healthcare for $8B, which has its April approval deadline quickly approaching.

Lyra Health Raises $235M, Acquires ICAS World

Posted on by Jason Barry

Mental health benefits provider Lyra Health is making a habit out of starting the new year with a ton of momentum.

In January 2021, Lyra closed $187M in Series E funding and entered a partnership with ICAS World to bring its benefits overseas. This week, the company raised another $235M at a $5.58B valuation, while announcing the acquisition of ICAS World as it begins to make international expansion a top priority.

  • Lyra provides a suite of in-person and virtual behavioral health benefits to over 75 large employers, offering accessible treatments for conditions such as depression and anxiety that are often stigmatized in the workplace.
  • The latest raise pushes Lyra’s private funding total to $916M and ranks it among the most well-funded companies in one of the hottest corners of the digital health market. The timing follows Lyra’s September announcement of a trio of new solutions designed to address complex conditions such as alcohol use disorder and suicidality. 
  • ICAS World is a global employee assistance provider with a specialist network that offers “culturally responsive care” and localized support in more than 155 countries and 66 languages. 
  • The acquisition greatly expands Lyra’s worldwide reach, allowing it to provide mental health coaching, therapy, and medication within a single platform to over 10M global members. That’s a big jump from the 2.2M members covered by Lyra prior to the acquisition.

The Takeaway

Lyra’s employer-facing model has quickly gained traction in the US, but mental health challenges are hardly isolated to US-based employees. The WHO estimates that productivity losses due to depression and anxiety cost the global economy $1T annually. Mental healthcare is a global challenge, and the ICAS acquisition is a large step towards making Lyra a global solution.

Headspace Health Acquires App-Maker Sayana

Posted on by Jason Barry

Headspace Health isn’t skipping a beat in its mission to create a comprehensive behavioral health platform, acquiring AI-enabled wellness app developer Sayana less than six months after forming through the merger of Headspace and Ginger.

Sayana emerged from the Y Combinator incubator in 2020 with $125K in Seed funding and a goal of introducing as many people as possible to self-care exercises rooted in cognitive behavioral therapy, acceptance commitment therapy, and dialectical behavioral therapy.

The company’s solutions leverage a chat-based AI avatar named Sayana to encourage users to track their moods, allowing it to personalize content delivered through its three primary apps:

  • The Sayana App provides mood tracking and journaling tools coupled with mindfulness exercises to provide insights into how users are feeling over long periods of time.
  • Sayana Sleep aims to match user moods to sleep patterns in order to help those struggling with insomnia fall asleep through custom relaxation sessions.
  • Sayana Workplace uses the same approach but targets it towards employers by helping their employees manage workplace stressors.

The acquisition brings Sayana’s AI expertise and team to the Headspace Health platform to improve its own recommendation algorithms and coaching offerings. The employer-facing component is also interesting given Headspace Health’s enterprise operations, which are a key growth driver for the company and are distributed by over 3,500 employers looking to increase productivity by improving employee wellbeing. 

Data, AI, and Accessible Care

Although Sayana’s 300k+ user base is fairly substantial, it’s tiny in comparison to the 70M+ members commanded by Headspace Health. More user sessions training the AI models should improve the recommendations and ultimately lead to better outcomes for users (and a large competitive advantage for Headspace Health if well executed).

Mental healthcare is a complicated challenge, and requires a scalable solution beyond hiring more therapists and putting them in front of a screen. With the acquisition of Sayana and its AI-enabled chatbot, we’re beginning to get a good idea of what Headspace Health’s solution might look like.

Rock Health Funding Trends for 2021

Posted on by Jason Barry

Regular Digital Health Wire readers could probably guess that 2021 was a spectacular year for digital health funding, and Rock Health’s latest full-year report confirms that investment in the space topped even the most bullish expectations.

  • Total funding for US digital health startups climbed to $29.1B across 729 investments, nearly doubling 2020’s former record of $14.9B. The growth was shaped by 88 different $100M+ rounds combining for $16.6B, including four of the largest digital health raises of the decade: Noom ($540M), Ro ($500M), Mindbody ($500M), and Commure ($500M). [Chart 1]
  • M&A activity grew at a similarly breakneck pace, with 272 M&A moves easily eclipsing 2020’s total of 146. Last year also saw a record 23 companies go public through either SPAC mergers (15) or IPOs (8), shattering the previous record of 8 exits set in 2020. [Chart 2]
  • The most funded value propositions of the year included R&D catalysts such as decentralized trials ($5.8B) and on-demand healthcare ($4.5B). Healthcare marketplaces were among the fastest growing segments, with 3.2x funding growth driven by D2C marketplaces like Mindbody and caregiver marketplaces like Honor. [Chart 3]
  • Mental healthcare was the most popular clinical indication among investors ($5.1B), raising $3.3B more than any other clinical focus. Outside of the pandemic’s less-than-stellar impact on many people’s mental health, this area has seen a funding frenzy due to the rise of virtual behavioral health platforms such as Lyra Health and NOCD. [Chart 4]

Bubble Watch

Despite last year’s record breaking digital health funding, Rock Health’s view on the market was that it “wasn’t an across-the-board bubble, but it wasn’t placid water either.” Many companies are exceeding pre-pandemic projections by wide margins, and it’s possible that historical digital health benchmarks are too low, as opposed to today’s valuations being too high. If these companies can find a way to sustain their momentum beyond the pandemic, there’s a chance we could see a repeat performance in 2022.

Digital Health Trends to Watch in 2022

Posted on by Jason Barry

Happy New Year, and welcome to the first Digital Health Wire of 2022. The past year was anything but boring for those working in digital health, with the pandemic continuing to expose the strengths and weaknesses of our healthcare system.

As with any new year, 2022 brings its own set of challenges for digital health companies to address, and a new roundup of the trends connecting them together.

  • Data Dominance – EHRs, wearables, and telehealth solutions are among the long list of technologies ushering in a new era of healthcare data collection, and leveraging this data to improve outcomes will be a centerpiece of digital health strategies in 2022 and beyond. As more data is able to be collected, more impactful insights will be able to be distilled, and Oracle’s recent acquisition of Cerner is likely a sign of more action to come in the pursuit of patient data.
  • Hospital at Home – Over the past year, the remote care space has gained a lot of momentum, with organizations like Moving Health Home beginning to advocate for policies that enable home-based clinical care. At the same time, remote care providers like DispatchHealth and Current Health have seen a surge in utilization, which will help to generate data demonstrating the effectiveness of home-care models and could accelerate regulatory support.
  • Less Tuck-In Acquisitions – Last year saw record digital health M&A activity by nearly every metric, but the rising valuations of private startups could start to have a negative impact on the total number of acquisitions. Tuck-in acquisitions, where larger businesses acquire companies for their talent or technology, might begin to see a slowdown if younger startups continue to command higher multiples earlier in their life cycles.
  • More Mergers – Although it’s possible that investor enthusiasm is making smaller companies less attractive as acquisition targets, it is also creating a landscape of well-funded startups that will be looking at consolidation as a way to combine strengths, such as with the recent merger of Ginger and Headspace.
  • Behavioral Health Spotlight – Behavioral health is among the fastest growing segments of digital health, with a stress-inducing pandemic simultaneously lowering the stigma surrounding mental illness while increasing mental health literacy. These circumstances have created a large disconnect between the supply of mental health providers and the demand from patients, and the companies tackling this problem will continue to attract a lot of attention from consumers and investors alike.

It’s hard to say which, if any, of these trends will be the top story of the next 12 months, but it seems likely that we’re heading into another year with more innovation than can fit into a five-bullet roundup. Wishing you the best in 2022, Digital Health Wire readers!

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