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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

After hiring CRISPR pioneer Jennifer Doudna, Sixth Street Partners is gearing up to invest behind what it believes is a limitless opportunity.

Why it matters: After the first CRISPR-based commercial application was recently approved for the treatment of a rare liver disease, Sixth Street’s Jeff Pootoolal and Vijay Mohan tell Sarah that CRISPR, 10 years into its discovery, has reached an inflection point. 

“Anywhere where there are bioprocesses involved we think there could be applications, and we want to be at the forefront of that,” Pootoolal, a partner, tells Sarah.

Pootoolal believes that by cross-pollinating data with CRISPR, opportunities will span beyond humans to animal health, crop sciences and bio-industrials. 

Mohan, a co-founding partner at the firm, says Sixth Street's flexible capital approach "will be super important as that space evolves," adding, “There is a huge wave coming beyond this.”

Driving the news: Doudna will assist Sixth Street in the formation of a scientific advisory board to advise on CRISPR-related opportunities and work with its health care investing team and growing cohort of data scientists and engineers.

Catch up fast: In September, Sixth Street participated in a $150 million round in Mammoth Biosciences, which was co-founded by Doudna and is developing CRISPR applications for disease detection. 

Between the lines: From Caris Life Sciences to Datavant, Sixth Street is experienced in the intersection of data and health care.  

For example, says Pootoolal, data-as-a-service models are becoming much more actionable, whereas in the past, “it was up to the pharma companies to take the data and interpret it.” 

Now, much more specific data sets are used for specific pharma use cases: “It’s data, the service part in the middle, and that’s where the value is for the pharma company,” he says.

Yes, and: CRISPR, as a simplistic research tool, can be applied across different modalities. 

“When you think about the people who are using it [CRISPR] and the people who interpret it, if you can get data scientists in between to help match the use case with the underlying research - I think it’s going to be incredibly powerful. And I think that’s where you’ll see a high intersection of CRISPR and data going forward,” Pootoolal says. 

1 big thing: CRISPR-fueled wave coming

Illustration of a double helix made out of a $100 bill.

Carlyle Group has agreed to acquire a stake in Orsini Specialty Pharmacy, joining Consonance Capital as an approximately equal investor in the rare disease specialty pharmacy business, sources tell Sarah. 

Why it's the BFD: Fueled by genomics and technology advances, rare disease drug and gene therapy development is accelerating quickly. 

Although large incumbents like UnitedHealth's Optum, Express Scripts and CVS play in specialty pharmacy, Orsini is one of the largest independent players dedicated to this niche. 

Carlyle’s investment comes about three years after Consonance recapitalized Orsini in partnership with CEO Michael Fieri. 

How it works: Orsini manages the handling and service requirements of costly and complex pharmaceuticals, with a particular focus on ultra-rare drugs that oftentimes serve patient counts in the thousands. 

Offerings include dispensing, distribution, reimbursement, case management services, among other personalized, therapy-specific services. 

State of play: Carlyle's investment, which sources say followed a Houlihan Lokey-run process, is the second specialty pharmacy deal in a matter of weeks. 

In January, TPG Growth bought a minority stake in Memphis-based AnovaRx, a full-service specialty pharmacy to biopharma manufacturers.

Meanwhile, one source says a large corporate is readying a divestiture of its specialty pharmacy asset. 

The bottom line: Specialty pharmacies play a critical role in getting niche drugs to those who need them most. 

Carlyle and Consonance declined to comment. 

2. The BFD: Carlyle takes Orsini stake

Illustration of a pipette dropping droplets of coins into a test tube.

With recently public digital health companies' stocks falling like dominoes around it, San Francisco-based Doximity (NASDAQ: DOCS) has remained standing.

Why it matters: Against the backdrop of a Great Resignation that's seen unprecedented levels of health worker burnout and departures, Doximity may be perfectly positioned for growth, analysts tell Erin.

The company is basically LinkedIn for doctors — and you can imagine how many of them are peeping other career options right now.

Also amid the pandemic, the pharmaceutical industry has been pushed to digitize its ad strategy, benefiting Doximity and its newsfeed for clinicians.

The latest: Just days ago, Doximity said it was acquiring Amion, a digital scheduling platform.

But co-founder and chief strategy officer Nate Gross says not to expect many future purchases. "We are a build, not buy, company and we’ll build most of the time," he says.

How it works: In addition to its social networking platform, Doximity offers clinicians a telehealth portal, secure messaging tools, and the ability to refer patients to other doctors.

The company uses a subscription model, something Gross tells Erin has helped it ink deals with large health systems.

Doximity also develops research based on its data. For example, this recent paper in Health Affairs estimated that women physicians earn roughly $2 million less than their male peers over an average 40-year career.

The bottom line: Despite the havoc being wreaked on freshly public health tech companies, it's clear that digital care tools — whether for clinicians to conduct virtual visits or to explore other careers — have become an indispensable part of health care.

"Digital health is no longer in a corner of a particular office with a mandate limited to one fiefdom," says Gross. "It's now a default strategy."

3. How Doximity stands firm

An illustration of a doctor holding files

Atommerce, a South Korean mental health services startup, raised $16.7m in Series B funding. Hashed led, and was joined by E&Investment, K2 Investment, Samsung Next and insiders Insight Partners and Korean GC Green Cross Holdings. http://axios.link/2HLt

clare&me, a Berlin-based virtual mental health startup, announced pre-seed funding round of €1 million. Munich HealthTech Fund YZR led the round alongside Antler and angel investors. https://www.clareandme.com/ 

DirectMed Parts & Service, a diagnostic imaging parts supplier owned by NMS Capital, acquired LBN Medical, a Denmark-based reseller of aftermarket diagnostic imaging equipment. https://lbnmedical.com/ 

HighCape Capital Acquisition II, a life sciences SPAC, pulled registration for a $200m IPO. http://axios.link/ddLz

4. Deals o' the day

Health tech readers, we made it to Friday. After getting your fill of health tech content, help our editor plan his Super Sunday menu! 🍽

🎒 Situational awareness:  Sarah commuted to the city on more than one occasion this week for an in-person meeting. At least in New York, it looks like many investors and bankers are trading in their sweats for biz casual after January's Omicron-driven setback.

One fun thing: Erin and Sarah say Super Boring not Super Bowl, but our editor George, as part of a family tradition plans the meal around foods born from the teams' cities. Send him ideas! (But save the skyline chili — George.)

💚 Thanks for reading Axios Pro Health Tech! Please ask your friends, colleagues and family members to sign up.

February 11, 2022

1 big thing: CRISPR-fueled wave coming