All Access

Health Tech Deals

Health Tech Deals Alerts

Alert

Standard

Health Tech Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Warburg Pincus is exploring a sale of Intelligent Medical Objects that could value the clinical data enablement company as high as $2 billion, sources tell Sarah. 

Details: The sale process has kicked off, with both private equity and PE-backed strategic buyers expected to participate.  

The Rosemont, Illinois-based company has strong cash flow and some $80 million in EBITDA, sources say, which suggests value expectations of about 25x.  

Evercore is advising the sellers, sources say.

Flashback: Warburg’s initial 2016 investment in IMO was said to be valued at some $200 million to $250 million, one source adds, implying a handsome return for the growth-focused PE shop.

How it works: IMO’s main product, IMO Core, is a clinical coding and language engine embedded in electronic health systems. 

IMO takes abstract codes and clinical terminology and converts them into simple language.

That helps clinicians — at the point of care — more efficiently create and access patient data, make accurate diagnoses, and ensure appropriate reimbursement. 

Yes, and: IMO created new clinical codes in the pandemic to support documentation efforts around vaccine administration, and more recently announced partnerships with Amazon Web Services and Cerner. 

The bottom line: As infrastructure or a utility for the health care system, IMO serves a very important function behind the scenes. 

The only other natural language processing player of this vein is Wolters Kluwer’s Health Language technology. 

💭 Sarah's thought bubble: Sources say IMO’s penetration in the US EHR market is already mature, and so potential buyers are likely focused on what the next leg of growth looks like. 

The company has already started expanding beyond the EHR, supporting CRO's research initiatives with clinical patient data, for example. 

It's also established a presence in the U.K., which hints at a potentially larger international opportunity.

Warburg declined to comment, while Evercore and IMO did rot return requests for comment.

1 big thing: Warburg's Intelligent Medical Objects hits the market 

Illustration of two speech bubbles, one with a red cross and the other with a dollar sign, and a "translation" symbol in the middle.

Koneksa, whose wearable digital biomarkers gather data for clinical research, collected $45 million in Series C funding. 

Why it's the BFD:  Investors are pouring capital into technology that supports clinical trial innovation, whether that's bringing trials to the home or improving study design and patient recruitment.  

This New York-based developer of at-home clinical trial tech provides one more data point. 

Details: AyurMaya led the financing, joined by Takeda Ventures, Velocity Capital and insiders McKesson Ventures, Merck Global Health Innovation Fund, Novartis, Spring Mountain Capital and Waterline Ventures. 

Koneska has raised just over $70 million to date, according to Crunchbase. 

2. The BFD: Koneksa nets $45 million

Illustration of a first aid bag filled with cash.   

Accenture, a multinational consulting and IT giant, is deepening its presence in health tech with a focus on AI and machine learning, senior managing director of global health Kaveh Safavi tells Erin.

Why it matters: The consulting firm helps health care companies and other corporations interested in entering the sector — such as retailers and telecom companies — strategize.

"We serve pretty much every kind of client who wants to get into health care," Safavi says. "A huge part of my work is helping them figure out what their health care strategy will be."

It's interested in supporting newer companies that are pushing the envelope rather than legacy businesses busy trying to catch up.

The firm also publishes research on the digital health sector, such as its recent report on meeting consumer expectations post-pandemic.

Among other things, the report concludes that the rate of digital health adoption has essentially flatlined because of issues related to data privacy and difficulties fitting into existing clinical workflows.

Details: Accenture's health tech division is looking specifically at problems "that can only be solved by combining humans and machines," Safavi says.

So far, health care has benefited from AI in ways that have made it safer, but not more affordable.  

What's next: The next generation of AI and human technology will help iron out physical and cognitive inefficiencies, he says. Some examples:

Capturing patients' biometric information from the bedside.

Translating a conversation between a patient and a doctor into structured clinical notes.

Multiple startups are playing in this space including Nuance, the clinical automation startup Microsoft recently purchased for $19.7 billion.

By the numbers: Founded in 1989 and headquartered in Ireland, Accenture has a market cap of $226.4 billion and employs roughly 624,000 people.

Accenture's health tech division employs roughly 23,000 people, or roughly 3% of the company's staff, Safavi says. (In other words, it ain't small.)

"It's one of Accenture's largest industries" across the 14 areas it serves, Safavi says.

3. Accenture's health tech strategy

Is it just us, or have you noticed takes left and right about companies like X, Y and Z being the next Shopify for health care?

Zoom in: First, what exactly does Shopify do? 

Shopify’s subscription-based software lets anyone launch an online store for their business and sell their products. 

The big question: Which digital health companies are doing the equivalent in the health care sector? Some candidates:

Ro offers health care companies the ability to integrate virtual and in-person care on Ro's platform.

Zus makes a "Lego kit for health care," and its early beta-phase adopters include Cityblock and Oak Street Health, among others.

Olive has built an AI-powered health care automation platform designed to serve as startups' tech backbone, and Circulo is a current user.

NexHealth helps small medical offices compete with large systems the same way Shopify helps independent merchants go up against mega-retailers.

HealthMe makes over clinics' websites into 24/7 e-commerce sites where services can be reviewed and purchased just like any other retail good. 

Where it stands: Do you agree with the analogy or have your own hot takes on the adoption of the buzzword? Write to us.

4. 💊 Your Daily Dose: Behind the Shopify for health buzz

Illustration: Sarah Grillo/Axios; Sources: @MarioATX_MD, @MilesNextDoor,  @BaskHealth, @ArynGatto

Trialjectory, maker of an AI platform to match cancer patients with the right treatment, closed $20m in Series A financing led by Insight Partners and joined by JAL Ventures and existing investors Contour Venture Partners, Rho Capital and TIA Ventures. https://www.trialjectory.com/

Wavely Diagnostics, a digital diagnostics company building apps for pediatric care, raised $2.2m in seed funding from backers including Ambit Health Ventures, WXR Fund, WRF Capital, HealthTech Capital, Purpose Built VC, Crosstimbers Capital Group and others. https://wavelydx.com/

The Fertility Partners, backed by Peloton Capital, acquired Ottawa Fertility Centre and expanded to 11 IVF clinics and over 20 locations. https://www.thefertilitypartners.com/

Tempus, a data-driven precision medicine company, acquired San Francisco-based Highline Sciences, a specialized clinical contract research organization focused on cancer. Financial terms were not disclosed. http://axios.link/Vq7u

5. Deals o' the day

Sixth Street hired Jennifer Doudna as its chief science adviser. Doudna and Emmanuelle Charpentier won the 2020 Nobel Prize in Chemistry for their discovery of CRISPR. http://axios.link/k6EB

January AI, a data-driven nutrition startup focused on blood sugar, named Maher Hanafi vice president of engineering from Thrive Global, where he served in the same role. 

6. It's Personnel

Hello, health tech enthusiasts. We have scoops, insights, and Erin closes us out today sharing her extreme temperature test over the weekend. 

🏊 Erin took the plunge over the weekend — the cold plunge, that is. At a trip to some nearby hot springs, she dipped her way from warm to hot to frigid pools and found it both refreshing and exhilarating. 

🙏 Thanks for reading Axios Pro Health Tech! Please ask your friends, colleagues and plunge crew to sign up.

February 08, 2022

1 big thing: Warburg's Intelligent Medical Objects hits the market