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the-axios-show

Mable, a genomics-guided migraine treatment startup, raised $3.2 million in seed funding, CEO Roman Rothaermel tells Erin exclusively.

Why it matters: Migraines are considered one of the main causes of disability globally, per the Centers for Disease Control and Prevention, yet few health tech interventions besides home-delivered medication are available.

Deal details: Initialized Capital led the seed round with support from First In Ventures, Arkitekt Ventures and Inaki Berenguer.

Context: Other consumer-facing digital health companies offer personalized migraine treatments without genetic testing, while several genomics companies offer migraine-focused genetic testing without personalized treatments. 

Mable's advantage is in combining the two, says Rothaermel, "We close the loop between genetic testing and making that information actionable."

The intrigue: Scientists still don't fully understand what causes migraines, but research suggests genetics and environmental factors contribute to them — so it remains to be seen how big of an impact genetic testing will have on patient outcomes.

Still, Rothaermel says that while there are over 25 drugs that are regularly prescribed for migraines, for many people, genetics interfere with how well many of them work. 

The migraine treatment market got a shakeup when pharma giant Pfizer acquired Biohaven, which makes leading migraine drug Nurtec, for $11.6 billion in May — signaling a renewed interest in a historically under-looked category. 

One fun thing: Rothaermel, who completed his Ph.D. in neuroscience at Oxford, came up with the idea for Mable after watching his fiancée struggle for years with debilitating migraines. 

"She was given one medication after another, passed from doctor to doctor, and prescribed medications she had to try for months," says Rothaermel. "It can take years to find a medication that works."

How it works: Mable plans to charge users out of pocket for its services, which can then be reimbursed. 

Those services include an initial assessment followed by a DNA test and physician consult, plus continuous care and follow-ups.

Mable's DNA test, which uses whole genome sequencing or WGS, rather than simply testing for common genetic variants or SNPs, looks for biomarkers the FDA has identified as impacting how people process migraine drugs.

What's next: Rothaermel says his goal is for Mable to be available in 41 states by fall.

1 big thing: Mable seeds DNA-guided migraine treatment with $3M

An ice pack made from a $100 bill on top of a person's head.

Wasatch Medical Clinic, whose providers use acoustic wave therapy to treat erectile dysfunction, is exploring a sale, three sources tell Sarah. 

Why it's the BFD: As both established women's health providers and femtech startups garner tremendous investor interest, more providers designed for men's sexual and reproductive health are gaining traction. 

What's happening: A Macquarie Capital-run sale process recently kicked off for the founder-run company, sources say. First-round bids are due next week and a sponsor outcome is deemed most likely. 

Wasatch is marketing adjusted EBITDA of $40 million on about $120 million of revenue for 2021, accounting for fully ramped-up clinics that were recently opened, sources say. Non-adjusted EBITDA translates to approximately $15 million.

Projected EBITDA for 2022 is closer to $60 million on about $175 million of revenue, they add. 

How it works: Wasatch clinics treat patients with an acoustic wave or low-intensity shockwave therapy for ED with the goal of stimulating the growth of new blood vessels in the penis. 

Several conditions including diabetes, obesity, high cholesterol or high blood pressure are considered risk factors for ED. 

Of note: The Herber, Utah-based company operates a direct-to-consumer model with services reimbursed on a cash-pay basis. 

Growth and customer flow have been fueled by its strong marketing engine, sources say, even as digital advertising has not yet been tapped.

Between the lines: Wave therapy sessions are typically held weekly for a period of six or so weeks, creating a captive population that Wasatch could be positioned to leverage, one source says. 

In other words, there's a perceived opportunity to cross-sell other men's health products to this patient group. 

Yes, but: Acoustic wave therapy to treat ED is not FDA-approved, and while not a new innovation, research is ongoing to determine long-term benefits. 

Whoever ends up investing in Wasatch probably envisions a bigger opportunity to create a more diversified, comprehensive men's health company, one source says.

State of play: Comps are few and far between, but other clinic groups dedicated to ED treatment include Seacoast Capital-backed Peak Performance for Men, which applies focused linear compression therapy. As for investment in the broader men's health category...

Posterity Health, a Parker, Colorado-based digital health startup dedicated to male fertility care, collected $6 million in seed funding earlier this month, led by Distributed Ventures.

Hims & Hers, a digital health startup offering men's wellness and telehealth via Hims, went public through a $1.6 billion SPAC deal last year. 

Digital health startup Ro, whose Roman unit operates a digital health clinic for men, soared to a $7 billion valuation in February.

Vault, which offers in-home treatment for men's health issues including hormonal imbalance and ED, snagged $30 million in Series A funding in 2020, led by Tiger Global Management. 

The bottom line: As men's health remains largely uncharted territory for private equity, Wasatch could enter as a good test case for the sector. Wasatch could not immediately be reached.

2. The BFD: Men's sexual health company Wasatch awaits bids 

Illustration of a stethoscope draped over a male symbol.

The hybrid care war is on, Jeff Gamble, the founder of concierge primary care network Rezilient Health, suggests in a sharp Twitter thread.

Why it matters: In the wake of Amazon's $4 billion One Medical purchase, industry observers and entrepreneurs are all asking: 

What's next for CVS, which was reportedly in talks to acquire the primary care clinic operator — and what will it mean for the future of hybrid care?

Details: Gamble explores several of CVS' options to compete in the hybrid care sector. It could:

Acquire a mid- to late-stage hybrid care startup, then integrate that company into its 9,900+ retail locations.

Buy Teladoc (Nasdaq: TDOC), and leave the responsibility of creating hybrid solutions in its hands.

What they're saying: Of the two scenarios, Gamble notes that the TDOC option is "way more fun." Why?

CVS and Aetna merged, and TDOC is already Aetna's exclusive telehealth provider.

TDOC has already made a host of acquisitions, from diabetes-focused health tech startup Livongo to device-centric Intouch Health.

Either way, "that integration would be absolutely wild," Gamble notes. "If I’m working in operations or infrastructure at CVS, I’m crying at the idea of that latter option."

💭 Our thought bubble: Several other public value-based care players could be takeover candidates as CVS and strategics scramble to compete. 

We're watching CareMax, Cano, Agilon, ApolloMed and Oak Street Health, whose stock was up 12.9% in the wake of Amazon-ONEM.

🍿 The takeaway: "Whichever way CVS goes, it’s going to accelerate a cascade of retailers pursuing an acquisition strategy to rapidly enter the hybrid care space," writes Gamble. "Grab your popcorn."

One thing is certain — the pressure to own primary care is on.

3. Tweet o' the day

Windrose Health Investors recapitalized RevHealth, a Morristown, N.J.-based provider of omnichannel health care communications supporting the life sciences industry. 

Axios wrote in March that RevHealth, with around $20m of EBITDA, was in the market via Houlihan Lokey. 

IBM said in an SEC filing that on June 30 it received a $1.065b cash payment and recognized a $232m pre-tax gain with the sale of health care software assets (under Watson Health) to Francisco Partners. 

That aligns with Axios' January report, at which time sources cited a valuation around the $1.1 billion to $1.35 billion zip code.

While the outcome meets expectations, price guidance was said to be significantly higher in last year’s sale process.

Elation Health, a San Francisco-based EHR startup, raised $50m in a Series D round co-led by Generation Investment Management and Ascension Ventures with support from Threshold Ventures, Ascend Partners and Fay Rotenberg and Jonathan Bush, per Forbes.

RxLive, a St. Petersburg, Flor.-based pharmacy tech developer, raised $5m in a Series A round led by SpringTide with support from Cardinal Health, bringing RxLive's total funding to $8m. https://rxlive.com

GHO Capital's Velocity Clinical Research acquired Clinical Research of Hamburg, its first European clinical research site. 

4. Deals o' the day

VSS Capital Partners hired Eric Kim as principal, from Optum, and Sai Parepally as vice president, from Consonance Capital Partners.

Firsthand named former Cityblock Health head of engineering Brennan Moore head of engineering.

Doceree named former WebMD executive Scott Hammersla to executive sales director, former Verix VP George Karyotakis to senior sales director, and former Health Media Network sales lead Keith Gomes to senior sales director.

Oshi Health named Cedars-Sinai's Gil Melmed and former president and chair of the American Gastroenterological Association John Allen to its medical advisory board.

5. It's Personnel

🎤 Situational awareness: Sarah is moderating an SVB webinar tomorrow on the health care venture market at 11:30am ET with Westlake Village BioPartners' Mira Chaurushiya, Lux Capital's Deena Shakir and SVB's Jon Norris. 

🏠 Erin is sheltering indoors for the foreseeable future while waiting out the smoke from several distant fires.

🙏 Thanks for reading Axios Pro Health Tech! Please ask your friends and family to sign up.

July 27, 2022

1 big thing: Mable seeds DNA-guided migraine treatment with $3M