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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Local Infusion, a tech-enabled ambulatory infusion center (AIC) startup, is emerging from stealth with a $4 million seed led by Brand Foundry Ventures and Meridian Street Capital, founder Woody Baum tells Sarah. 

Why it matters: The demand for infusion care outside of the hospital is accelerating, calling for more innovation around patient experience because people with chronic conditions often require treatment for multiple years at a time. 

Investment in the AIC sector has been accelerating, but the focus is largely on filling the capacity gap in a low-cost manner, Baum says.  

Zoom in: Affordability is important but just one part of the equation. 

Whereas consumer-focused specialties like dental are powered by technology that makes for a more seamless user experience, "referral-based health care practices have lagged behind," Baum says. "It takes a little longer to change those patterns."  

How it works: Local Infusion says it will treat patients with chronic autoimmune diseases on specialty medications in private, comfortable suites.

It aims to harness digital tools and other technology to improve the treatment process, starting by simplifying what are typically lengthy referral and onboarding processes.

It offers a dedicated infusion guide to answer questions throughout treatment — around both the care plan and billing.

The big picture: Baum sees an opportunity to leverage the powerful relationship AICs build with patients into a care coordination model.

"We have this ability to capture these patients, develop relationships with them and act as an extension of their primary care providers," Baum says. "I don't want to just compete on being the lowest-cost provider."

What's next: The seed funding will be used to build out Local Infusion's tech team and support the launch of its first five clinics, which are intentionally situated in areas Baum says are facing a massive access problem: Maine and New Hampshire.

In both states, the cost differential is among the nation's highest between between the status quo — what the hospital is charging — and what Local Infusion can charge, Baum says.  

Five locations are scheduled to open in those states by early next year, starting with a clinic in Concord, New Hampshire, in December.

Local Infusion will follow with clinics in Connecticut, New York and New Jersey in 2023 and 2024, Baum says.

The backstory: Baum, an investment banker early in his career, recognized how antiquated the AIC model was from a tech and patient experience perspective via his previous role as CEO of OI Infusion, an in-office infusion center management company. 

Local Infusion hired former Kindbody product development specialist Tina Liu as head of product and Ashley Knapp, former McKesson Intrafusion infusion nurse and clinical manager, as head of sales. 

1 big thing: Local Infusion bags $4M in debut 

Illustration of a saline bag solution with money as the liquid in the bag. 

State of play: Investors are flocking to infusion care, as payors call for more affordable options and patients demand quality and convenience in a large and growing market. In other activity... 

Novo Holdings in September agreed to acquire Pritzker Private Capital's KabaFusion, a home infusion company specializing in intravenous immunoglobulin (IVIG), at a $1 billion-plus valuation, sources told Axios. 

Frontline Healthcare Partners in August invested into Scottsdale-based AIC LivWell Infusions.

Heritage Group in July made a growth equity investment in TwelveStone Health Partners to grow its infusion center platform.

InTandem Capital Partners in March launched Denver-based Vivo Infusion via simultaneous investments in AIC businesses MPP Infusion Centers and ID Consultants.

One Equity Partners in January invested in Fairfield, New Jersey-based InfuCare Rx.

Oak HC/FT in November 2021 led a $50 million funding into Infusion for Health, a Southern California-centric AIC platform.

Great Hill in September 2021 injected a $100 million growth investment into IVX Health, an AIC network also backed by Linden Structured Capital, McKesson Ventures, and others. (Linden Capital also owns Vital Care)

Waud Capital in August 2021 bought PromptCare, which comprises an in-home infusion therapy business and complex respiratory business. The same month River Cities Capital invested into Oklahoma City-based AIC FlexCare Infusion Centers.

State of play: Infusion care

GHO Capital and Vistria Group are joining hands to acquire Alcami, a contract development and manufacturing organization serving biotech and pharma companies, from Madison Dearborn Partners and Ampersand Capital Partners.

Why it's the BFD: The transaction illustrates that companies perceived as high-quality, profitable and growing — buoyed by strong industry tailwinds (there are many in pharma services) — can still get financed amid the current debt drought, Sarah writes.

Details: The new investors will assume a 50/50 controlling interest, with Ampersand and Alcami management reinvesting significant equity as part of the acquisition. 

Terms were not disclosed, but North Carolina-based Alcami is ramping up toward $100 million of EBITDA going into next year, sources say. 

There was no formal auction process, with the deal coming together on a bilateral basis, they say.

Flashback: Madison Dearborn in 2018 won the William Blair-run auction for Alcami, acquiring the business from Ares Capital's credit arm in 2018 at a roughly $675 million valuation. 

Ampersand in 2020 joined as an investor via Alcami's acquisition of its portfolio company TriPharm Services.

How it works: Alcami focuses on sterile fill-finish of both biologics and small molecules, formulation development, lab services, and cGMP biostorage of high-value temperature-sensitive biologics, pharmaceuticals and materials.

Alcami has more than 1,000 clients globally.

What they're saying: Already an investor in three post-commercial pharma services companies, Vistria had been hunting for the right opportunity to kickstart a platform in the clinical services space, senior partner Jon Maschmeyer says. 

Sterile fill-finish is a high-growth market, Maschmeyer says, and in the wake of pandemic-accelerated trends including on-shoring, "we think its manufacturing space is unique." 

Context: Alcami has invested $140 million-plus in capital expenditures to develop five sterile fill-finish manufacturing lines and additional laboratory space to support both biologic and small molecule programs. 

Alcami has 675,000 square feet across the country.

What's next: Year one is tilted toward organic growth and ramping up its new manufacturing capacity, and then M&A could be in the cards, Maschmeyer says.

Alcami will consider acquisitions that expand on its core CDMO capabilities and/or those that, leveraging GHO's deep pharma services experience in the European market, give it an entry point in Europe. 

Who advised: Jefferies and OES were buy-side financial advisers, while Morgan Stanley worked with Alcami.

Credit funds managed by Ares Management provided financing. 

2. The BFD: GHO and Vistria snap up Alcami

illustration of one gloved hand giving another gloved hand a beaker of water

MedCrypt, a San Diego-based provider of cybersecurity tools for medical devices, has raised $25m in Series B funding from Intuitive Ventures, J&J Innovation, Section 32, Eniac Ventures, Anzu Partners and Dolby Family Ventures. https://www.medcrypt.com

Joylux, a Seattle-based menopausal health services and devices company, has raised $13m in Series A funds from J-Ventures, J-Impact and Kathy Fields. https://joylux.com 

Neurotrack, a California-based developer of digital cognitive health assessment and monitoring tools, has raised $10m. https://axios.link/3FUT16Y 

5th Century Partners has invested $20m for a minority stake in Peace Out Skincare, an SF-based developer of acne treatment products. https://axios.link/3t8GhCa

Vira Health, a London-based developer of menopause support tools, has acquired Alva, a London-based menopause treatment prescriber. https://axios.link/3G3KsqR

Profusa, an Emeryville, Calif.-based developer of oxygen-monitoring biosensors, has agreed to go public via NorthView Acquisition Corp. (Nasdaq: NVAC). The company raised over $60m in VC funding from firms like Maxim Ventures, 3E Bioventures Capital and Tasly Holding Group. 

Interesting press release language on this one, acknowledging the SPAC redemption surge. It says that the company’s implied valuation would be $264m assuming 80% redemptions, or $416m without any redemptions.

3. Deals o' the day

Capital Rx named former Humana head of HR Marcel White its first chief people officer.

Vita Health named former Brightline chief medical officer Peter Antall its chief medical officer.

OHO Interactive named Topline Partners managing director James Gardner director of health care strategy. 

4. It's Personnel

🇺🇸 It's Tuesday, Health Tech readers, and Election Day, so get to your polling place or drop off that ballot, and follow axios.com for midterm coverage tonight.

🧪Situational awareness: A federal judge has rejected a bid for a new trial for former Theranos CEO Elizabeth Holmes. She faces up to 20 years in prison. 

🙏🏻 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Brad Bonhall. Please ask your friends and colleagues to sign up.

November 08, 2022

1 big thing: Local Infusion bags $4M in debut