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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Thomas H. Lee Partners has agreed to acquire health care data enablement company Intelligent Medical Objects, the parties tell Sarah exclusively.

Details: The deal marks an exit for Warburg Pincus six years into its investment, valuing the Rosemont, Ill.-based company at north of $1.5 billion, sources familiar with the terms say.

Why it matters: Clinical data quality has long been a problem for different health care stakeholders, and the opportunity exists to tackle this problem for providers, life sciences companies, payers and public health entities.

“Everyone is sort of dealing with that same messy data pool,” IMO CEO Ann Barnes says. 

“There is an enormous void in the market now, specifically around this deep understanding of clinical data and how to standardize and normalize it, and how to reach into that big vat of data and pull out very specific use cases,” Barnes says.

The deal price equates to a forward valuation multiple of 25x-plus, the sources say, based on EBITDA of approximately $60 million.

Evercore advised IMO, while William Blair worked with THL.

How it works: IMO’s main product, IMO Core, allows doctors to document patient information “in their own language, the way they speak,” Barnes says, rather than in abstract codes or complex clinical terminology.

More efficient documentation can minimize clinician burnout, reduce unnecessary care and charges, optimize billing and reimbursement, streamline data management, and ultimately, inform better care.

“There’s no data more valuable than the clinical data," says Shahab Vagefi, who joined THL six months ago as a managing director from Martis Capital.

By the numbers: IMO manages more than 5 million clinical terms and maps to all major coding systems.

Used by over 740,000 physicians daily, IMO is embedded within every major EHR (electronic health record) and many minor EHRs in both the acute care and ambulatory settings.

“You have this mishmash of different data coming together,” Vagefi says, with IMO acting as “the Switzerland” of patient information tools.

What's next: The investment will propel product development and expand commercial relationships with hospitals and in non-provider markets.

M&A will become part of the equation for IMO, which has for the last 30 years been an organic-only growth story.

“First and foremost there are potentially some AI tools we can use,” the CEO says.

The company has already has built new workflow products like surgical scheduling, for instance.

The bottom line: Simplifying patient and treatment data can empower stakeholders across the health care ecosystem, and IMO seeks to be the utility that helps all constituents get there.

1 big thing: THL buys Intelligent Medical Objects in $1.5B-plus deal

Illustration of a medical cross inside of a speech bubble.

PocketHealth, a medical image sharing startup, raised $16 million in Series A funding led by Questa Capital to expand its U.S. presence, co-founders Harsh and Rishi Nayyar tell Erin exclusively.

Why it's the BFD: For decades, established tech giants and startups have been striving to shake up the electronic health record (EHR) industry, and recent anti-data-blocking legislation giving patients the chance to access their health information with apps has reinvigorated those efforts. 

Details: Existing investor Radical Ventures also participated in Toronto-based PocketHealth's Series A round, bringing the company's total capital to $22.5 million.

How it works: The Nayyar brothers stressed that PocketHealth is not an EHR company but rather a technology that integrates with existing EHRs, letting patients collect and share X-Rays and MRIs from their personal records.

Pocket charges patients a yearly $49 subscription fee to collect, download, share and transport their medical images, functioning as a kind of Dropbox for health scans. The images are end-to-end encrypted for security, Rishi Nayyar tells Erin.

Someone with a Pocket account can share their images with someone who doesn't, and users can also revoke that permission at any time, adds Nayyar.

Users can also share their records with clinicians via fax.

The company also has an enterprise subscription where hospitals can share images with other providers.

What they're saying: Industry observers tell Axios they see a lot of value in making health records easier to access and share, adding that in their view, the category would benefit from more investment.

"I could see a company of this kind riding a good wave," Christopher McCord, managing director at consulting firm Healthcare Growth Partners, tells Erin. "It's a natural evolution of further empowering the patient."

What's next: Pocket plans to use the funding to hire more staff and build more clinical partnerships in the U.S. and Canada, the Nayyars say.

"We started with images because it’s such a critical part of the process but we’re adding more and more context," Nayyar says.

Pocket plans to allow patients to upload more parts of their medical records, such as COVID vaccination records, lab results and medication history.

2. The BFD: Medical image sharing startup collects $16M

Illustration of a phone with an x-ray image of a dollar sign.

Apploi, a New York-based health care staffing startup, raised $25m in Series B funding led by m]x[v Capital and joined by Defy and Underscore, bringing total capital raised to $38m. 

PocketHealth, a Toronto-based medical image sharing startup, raised $16m in Series A funding led by Questa Capital with support from existing backer Radical Ventures, bringing the company's total capital to $22.5m. 

Altoida, a Washington, D.C.-based diagnostics app for Alzheimer’s disease, raised $13.7m in new Series A funding (round total now $20m). Whitecap Venture Partners and M Ventures co-led, and were joined by Hikma Pharma, HonorHealth, btov, Alpana Ventures, Fyrfly and VI Partners. http://axios.link/w3Rm

Inner Cosmos, an SF-based neurotech startup, raised $10m in seed funding. Lool Ventures led, and was joined by KittyHawk VC and Loup Ventures. www.innercosmos.io

Jeenie, maker of a platform linking clinicians and patients to live interpreters raised a $9.3m Series A funding round led by Transformation Capital. https://jeenie.com

Reema Health, a maker of a community-based health tech platform, raised $8m in a funding round led by MaC Venture Capital and DNA Capital, bringing its total funding to $10m. https://www.reemahealth.com/

The Vistria Group invested in Professional Health Care Network, a Phoenix-based home health care management services company.  https://prohcn.com/

Amulet Capital Partners recapitalized Lighthouse, a Columbus, Ohio-based network of outpatient substance abuse and mental health treatment facilities. www.lighthousebhsolutions.com

Paine Schwartz Partners invested in Hendrix Genetics, a Dutch animal genetics company. www.hendrix-genetics.com

3. Deals o' the day

Rune Labs named Mark Dresser to its advisory board. Dresser is SVP of biomarker sciences and clinical pharmacology at Gilead Sciences and president of the American Society for Clinical Pharmacology and Therapeutics.

Centene Corporation promoted Matthew Tran to senior director of member experience from director of product innovation.

Favor (FKA The Pill Club) named Christina Stejskalova head of data from Lively, where she was director of analytics.

4. It's Personnel

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March 31, 2022

1 big thing: THL buys Intelligent Medical Objects in $1.5B-plus deal