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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

The convergence of three independent and flourishing verticals — telehealth, mail-order pharmacy and home testing — was a big driver of  Everly Health’s recent acquisition spree, CEO Julia Cheek tells Erin. 

“We realized at Everly Health specifically that we needed to own more of these core capabilities,” Cheek, who founded the Austin-based virtual diagnostics company in 2015, said during Axios Pro Insight’s live event on Friday. 

The goal? Create an integrated experience such that Everly Health acts as a platform-as-a-service for innovative companies that want to bring diagnostics to the home. 

Catch up quick: Everly Health, whose investor base includes Shark Tank’s Lori Greiner, Blackrock, Lux Capital and Goodwater Capital, was last valued at $2.9 billion in March 2021 amid a pair of acquisitions, Bloomberg reported. 

That month, the company bought PWNHealth, a diagnostic clinician network, and Home Access Health, a provider of home lab tests. 

It followed in October with the acquisition of Natalist in a push to build out its women’s and fertility health business. 

Having grown to some 700 employees today, Cheek emphasized the explosion of its women’s health arm, which has witnessed 300%-400% YOY growth since 2020, she says.

“This reflects what we’ve always known about women as the decision-makers in health care, but also, as women are often underrepresented in the health care system, needing to find unique solutions," says Cheek.

State of play: Everly Health is part of the broader digital health consolidation wave, which has witnessed record funding levels and investment activity and seen valuations soar throughout the pandemic. 

“This is an industry that is not only so ripe for innovation but is something that is so evergreen,” Cheek says. 

“Everyone needs a lab test almost annually, if not more often. Most people prior to COVID compared it to going to the DMV, [but] when you ask them what they would need a lab test for — they didn’t actually know.”

Increased awareness around home testing emerged as a silver lining of the pandemic, she says. With billions of dollars going into innovation to support the industry's mass adoption, Everly has been “set up to benefit from that” as reflected by valuations, Cheek adds.

Between the lines: Everly got its start as a consumer-first company, but consumer brand-building has grown more difficult — primarily on Facebook — because of Apple’s anti-tracking initiative.

Today, Cheek says, “the social media environment for advertising is very expensive," and the company is moving to launch a B2B strategy, Erin reported exclusively last month.

Yes, but: It’s not always easier to add a B2B strategy, she says. 

The B2B side is seasonal and contract-dependent, says Cheek: “In many ways, it’s less in your control than performance marketing."

“A well-balanced business has a flywheel that can reinforce both,” she adds.

The big question (about now-defunct testing startup Theranos): Cheek says she's not yet watched Hulu’s Theranos docuseries, "The Dropout," and emphasizes that Everly has always avoided creating its own tests. 

But whether via blood prick, urine or saliva samples, home diagnostics are the future, she adds.

1 big thing: 🎤 Q&A with Everly Health's Julia Cheek

Axios Pro's Erin Brodwin has a live virtual conversation with Everly Health's Julia Cheek

GoodRx (Nasdaq: GDRX), a drug pricing comparison company, is buying vitaCare Prescription Services from TherapeuticsMD.

Why it matters: The high costs of medications remain a major barrier to access for many patients. With vitaCare, GoodRx adds technology that strives to improve patient adherence to brand drugs via more affordable options.

Besides offering navigation tools for greater transparency and savings on medications, its network of third-party pharmacies helps fill prescriptions.

VitaCare via GoodRx believes it will deepen its reach among pharmaceutical manufacturers. 

By the numbers: GoodRx agreed to buy vitaCare for $150 million cash, plus additional consideration of $7 million contingent on the target's future financial performance. 

State of play: GoodRx, which raised $1.1 billion in its September 2020 IPO, is among the flurry of digital health companies that have seen major volatility in more recent months.  

GoodRx shares tumbled some 40% in the last week after its quarterly earnings report fell short of expectations.

The company said it anticipates revenue growth of about 23% for the year, well below the 36% that analysts expected, Barron's wrote.  

2. The BFD: GoodRx snaps up vitaCare

Health Gorilla, a provider of interoperability tools for patient health data, raised $50m in Series C funding led by SignalFire with participation from Epsilon Health Investors, IA Capital and Nationwide Ventures. https://www.healthgorilla.com

General Catalyst invested an initial $20m into Homeward, a value-based care startup focused on rural health care and led by former Livongo president Jennifer Schneider. https://homewardhealth.com/

MDisrupt, a startup helping digital health innovators generate real-world data, raised $6m in seed funding from firms and individual investors including Bren Investments, Matthew Holt, Chantell Preston, Grail co-founder Jessica Owens, and AKESOgen co-founders Mark Bouzyk and Robert Boisjoli. https://mdisrupt.com

Rocket Health, a Ugandan telehealth startup, raised $5m in Series A funding led by Creadev and joined by Grenfell Holdings and LoftyInc Capital Management. http://axios.link/vRoi 

Credo, an automated patient medical record retrieval startup, raised $3m in seed funding led by FirstMile with support from Hannah Grey Ventures, SpringTime Ventures and Headwater Ventures. https://www.credohealth.com  

Private equity firms including Advent International and companies including Aveanna Healthcare (AVAH.O) have expressed interest in acquiring the home health and hospice business of Encompass Health, per Reuters. The unit, Enhabit, could be worth as much as $3b, the report said.  http://axios.link/wNls 

Microsoft completed its $19.6b deal for Nuance Communications, which provides health care-focused cloud-computing and AI offerings. The deal was first announced last April. http://axios.link/eFNr 

Boehringer Ingelheim Animal Health USA, an animal products company, made an undisclosed investment in TeleVet, which provides practice management software and tech for veterinarians. Austin-based TeleVet is backed by Mercury Fund. https://televet.com/

Totally (AIM: TLY), a U.K.-based health care- and well-being-services company, agreed to acquire Pioneer Health Care, an independent provider of specialist NHS secondary care services, for £13.0m. https://www.pioneerhealthcare.co.uk/

3. Deals o' the day

Randolph Legg, president and head of the commercial business for Boehringer, will join TeleVet's board of directors.

4. It's Personnel 

☀️ Situational awareness: Sarah is at ViVE in Miami Beach through Wednesday. Don't hesitate to stop her in the halls to say hello, or shoot her a note if you'd like to link up!

And next week Erin will be at HIMSS in Orlando. Sunshine State, here we come! 

➡️ Axios Pro: Media Deals is finally here, created for professionals in media, telecom, entertainment and technology.

Pro Reporters Kerry Flynn and Tim Baysinger bring a wealth of experience and connections to every newsletter.

⛄ Yes, and, Erin was stoked to ride on fresh pow at Tahoe this past weekend and isn't sure how she's going to cope with sunshine and 80-degree weather at HIMSS next week. 

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

March 07, 2022

1 big thing: 🎤 Q&A with Everly Health's Julia Cheek