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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

The graffiti art-bedecked halls of the ViVE health care conference this week echoed with talk of GLP-1s, AI-powered doctor's assistants, and cybersecurity.

Why it matters: All three topics are poised to make big changes to the way health care is currently delivered, Erin writes.

What they're saying: Telehealth opportunities fueled by the GLP-1 explosion include long-term care coordination, healthy food delivery, drug discounts and pharmacy tech automation, several executives told Erin at the conference.

"Weight loss isn't transactional; it's long-term care," says SteadyMD COO Yarone Goren. "It's the hard mode of telehealth. It starts with lab work and it's a 6- to 12-month patient journey — it puts more demand on us."

"We see GLP-1s as a great forcing function; if you don't eat right on them, they don't work," said Instacart Health VP and GM Sarah Mastrorocco.

Instacart won't prescribe medications or offer coaching, but the grocery delivery company "can help make sure they're getting the right nutrition,"  Mastrorocco added.

GoodRx's business was once dominated by hypertension drugs. Now, "it's completely swapped for GLP-1s," with Ozempic leading the charge, said president and chief commercial officer Dorothy Gemmell.

Between the lines: Drugs for erectile dysfunction may have jump-started the first wave of telehealth by ushering in a short-term care relationship that saw companies such as Ro and Hims soar.

Yes, but: More complex GLP-1 medications including Wegovy and Ozempic require more complicated and comprehensive care, which could see a different set of providers benefit.

What we're watching: VC Vive Collective expects to back a pharmacy tech startup this year, as the GLP-1 frenzy increases demand for automation, VP Kathy Ku tells Axios.

"GLP-1s are huge right now and even before that, getting drugs to the right patients — that transition — a lot gets lost in that process ... prescribing, filling that first drug, and then refills," Ku said.

Transcription tool developers like Nuance, Nabla, Abridge and Suki were also all the rage at ViVE.

The core differences between the providers are around price — per-person, per-month costs heard at ViVE range from $200 to $650 — and rates of accuracy and latency.

Zoom in: Tampa General Hospital CIO Scott Arnold says physicians implementing tools from Microsoft-owned Nuance are excited — "and they don't normally get excited about these things," he adds. "The idea of shortening their day is attractive."

Most of Tampa General's providers sign into their EHR Epic around 6:00 am, sign off around 6:00 pm, then come back on an hour later and stay on until 10:00 or so.

"Then the next day they start over again," he said. "It's no way to live."

Follow the money: The hospital chose Nuance because of its deep existing relationship with Microsoft, Arnold said.

"It's a little bit more of a sure thing to us right now because of the closeness with the source of the tech, so we're going down that road for now, but that doesn't mean in the future we won't try others."

Friction point: The unprecedented cyberattack on Change Healthcare — still roiling operations at pharmacies and hospitals after 10 days — was the last emerging theme at ViVE.

The attack could become a crisis, executives told Erin.

The bottom line: Big changes — positive and negative — are coming for health care delivery, and the winners and losers are just beginning to shake out.

1 big thing: Overheard at ViVE

Credit: Axios reporter Erin Brodwin. Panelists including Vida Health's Joe Murad, Amwell's Cynthia Horner, Amazon's Vin Gupta, and Knownwell's Angela Fitch discuss GLP-1s at ViVE 2024.

Panelists including Vida Health's Joe Murad, Amwell's Cynthia Horner, Amazon's Vin Gupta and Knownwell's Angela Fitch discuss GLP-1s at ViVE 2024. Photo: Erin Brodwin/Axios

Moxe Health, a clinical data exchange tech platform, raised $25 million in debt financing from Trinity Capital, CEO Dan Wilson tells Axios' Claire Rychlewski exclusively.

Why it's the BFD: The development of a value-based health care system hinges on timely access to patient data.

How it works: Moxe aims to help providers and payers exchange clinical information rapidly, facilitating release-of-information requests and record retrievals between parties.

Madison, Wisconsin-based Moxe serves major health plans and about 100 health systems, integrating with major electronic health records (EHR) vendors Epic, Cerner, Meditech, Allscripts and Athenahealth.

What's next: Moxe will help its health system clients process data to other stakeholders like third-party analytics providers or payments vendors, Wilson says.

"We're also expanding to help providers work with health plan data directly within their EMR," he says.

Zoom in: Trinity's investment is designed to last "a couple of years," per Wilson.

Moxe isn't yet profitable, the CEO says, declining to disclose revenue.

The company has raised $50 million to date from investors like Piper Sandler Merchant Banking, Vensana Capital and 3M Ventures.

The big picture: Legislation like the 21st Century Cures Act has tried to address continued gaps in interoperability.

CMS last year proposed additional rules to hold health organizations accountable for blocking health information.

"We've invested in EHRs. We've digitized clinical data," Wilson says. "And we still don't have access to that clinical data to drive efficiency throughout the health care ecosystem."

State of play: Wilson named private equity-held players like Parthenon-backed MRO, NewSpring Healthcare-backed Verisma and New Mountain Capital-backed Datavant as Moxe's primary competitors.

Wilson called a private equity investment a "tried-and-true path that we would go down," should Moxe want to pursue it.

Moxe sells into hospitals, and Wilson admits he's "more cynical than not" on General Catalyst's bid to acquire Ohio-based health system Summa Health.

"I think it'd be very cool to see it work. Certainly, we know that innovation takes a long time to diffuse throughout health care," he says, calling the endeavor an "R&D test center."

Trinity Capital managing director Rob Lake says he's curious about what regulatory challenges GC faces, particularly when installing novel technology.

2. The BFD: Moxe Health nabs $25M debt raise

Illustration of a cursor hovering over a health plus icon, about to click "Open" from a drop down menu.

Clasp, a SaaS platform for employee benefits infrastructure, raised $1.5 million in initial funding, CEO Amar Jasarbasic tells Aaron exclusively.

Why it matters: 85% of workers find their benefits packages confusing, leading to underutilization, dissatisfaction and loss of talent.

Individual investors include Bedrock Capital founder Eric Stromberg, Check CEO Andrew Brown, and Willem Van Lancker, former head of incubation at Thrive Capital.

Clasp is generating revenue, Jasarbasic says, declining to disclose figures.

How it works: New York City-based Clasp's application programming interface aims to help benefits platform developers, benefits brokers and payroll companies build a compliant benefits software.

Clasp's features include carrier integrations, plan enrollment and payroll deductions.

"We want to be the Stripe but for benefits," says Jasarbasic.

Many users Clasp serves are in construction and other fields where health benefits might be less accessible, says Clasp co-founder Zach Zhang.

For Base10 Partners, the "headless" nature of Clasp's benefits platform was attractive, principal Caroline Broder says.

This "means that it can be flexible to the needs and profile of the employers with which they partner," Broder says.

What's next: Jasarbasic says the company is focused on building integration with every benefits carrier.

Runway of the funding is long, and Jasarbasic sees the company hitting profitability in the near term.

🔗 1 fun thing: The name "Clasp" references how clasps connect chains together, Jasarbasic says — with benefits as the missing link.

3. Clasp raises $1.5M for a better employee benefits experience

Illustration collage of a hand hovering over three identical medical crosses and numerous geometric shapes

Want more health tech deals? Check out the Axios Pro Deals Tracker.

• Argá Medtech, a Switzerland- and San Diego-based developer of cardiac ablation technology for cardiac arrhythmias, raised $58.6m in Series B funding led by insiders Advent Life Sciences and Earlybird, and joined by new backer Gilde Healthcare. argamedtech.com

• Salvo Health, a New York-based GI provider enablement startup, raised $5m in seed extension funding, co-led City Light Capital and Human Ventures. salvohealth.com

• KKR-backed clinical trial site network Headlands Research acquired clinical trial site Pharmasite Research. axios.link/4bXnnDK 

• Goldman Sachs is running a process on outsourced managed health services company Omega Healthcare to extend its hold and deliver liquidity to LPs, Buyouts reports. Evercore is banking the deal, potentially worth around $1 billion. 

• Icon, a Dublin-based pharmaceutical manufacturing and research company, acquired HumanFirst, a San Francisco-based patient-centered research company for biopharma, per STAT. axios.link/3T13liX

4. Deals o' the day

• Josh Rose, former head of clinical trial strategy at CVS Health, joined Hawthorne Effect as CEO. axios.link/3USR5na

• Scott Graves is leaving Ares Management, where he's co-head of private equity and head of special opportunities. axios.link/4bXry22

• Cassandra Pratt was promoted to chief human resources officer from director of HR at Progyny. progyny.com

• Joe Grasso was promoted from senior director to VP of workforce transformation at Lyra Health. lyrahealth.com

5. It's Personnel

👶 How fertility coverage mandates could clash with IVF restrictions — Axios

🚨 Changes at Amazon-owned health services cause alarm among patients, employees — WaPo

6. Your daily dose

illustration og a person holding an x-ray that reads "daily dose" up to a light

Happy Thursday and end of ViVE Week to all who celebrate!

🖥 Situational awareness: UnitedHealth officially confirmed the cyberattack on subsidiary Change Healthcare was perpetrated by threat actor ALPHV/Blackcat, as first reported by Reuters on Monday.

🍽️ Aaron is looking forward to dinner at Le Bernardin, hosted by THL tonight. 

🙏 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Egan Millard. Please ask your colleagues, friends and family to sign up.

February 29, 2024

1 big thing: Overheard at ViVE