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The Healthcare Investor

Insights on Issues & Trends that Impact Investments in Healthcare & Life Science Businesses

Healthcare & Life Sciences Private Equity Deal Tracker: Flowonix Medical Secures $40 Million in Financing

Posted in Healthcare Services Investing

Earlier this month, Flowonix Medical announced it had obtained debt and equity financing totaling approximately $40 million.

Flowonix, headquartered in Mt. Olive, N.J., is focused on providing implantable drug delivery solutions and has developed an implantable drug pump designed to deliver therapeutic drugs into the spine to relieve a variety of chronic disorders.

The transaction includes $20 million in equity investment, led by a PE fund managed by Élevage Capital. The investment also included participation from Clarus Ventures and other existing investors, as well as new investors including Hercules Technology Growth Capital. The fundraising also included $15 million in venture term debt financing and an accounts receivable line credit of up to $5 million from Hercules.

Flowonix indicated it expects to use the proceeds from the financing round to invest in sales and marketing infrastructure, new product development and to support growth of its Prometra Programmable Infusion Pump System in the chronic pain market.

Baird Capital Closes $185 Million Fourth VC Fund

Posted in Healthcare Services Investing

Baird Capital has announced the final close of its fourth venture capital fund with a total of $185 million in committed capital.

This figure exceeds Baird’s original goal of $150 million and the size of its previous fund ($171 million, according to a Crain’s report).

Fund IV will focus on technology and services companies, healthcare, diagnostics and medical devices. Baird Capital has invested prior funds in healthcare.

Baird indicated Fund IV has already invested in five companies: Catalyze, emids, Integrated Diagnostics, NeuMoDx Molecular and WordStream.

Healthcare & Life Sciences Private Equity Deal Tracker: Monteris Medical Secures $30 Million in Financing

Posted in Healthcare Services Investing

Monteris Medical has announced it has secured $30 million in series B financing.

Monteris, headquartered in Plymouth, Minn., is a developer of minimally invasive laser systems for the ablation of pathologic brain lesions such as primary and metastatic tumors.

The funding round was led by new investor Birchview Capital. Also participating in the round was new investor The Vertical Group and existing investor BDC Capital Healthcare Fund.

Monteris indicated the financing would go toward supporting an expansion of commercial and clinical programs for the Monteris NeuroBlate robotic neurosurgical system.

CMS Finalizes Rules for ESRD Dialysis Payment System and Incentive Program

Posted in Healthcare Services Investing

Private equity investors continue to be active investors in the dialysis industry, as we’ve frequently discussed in the past, including in the Law360 report on “Private Equity Interest in the Dialysis Sector Continues to Thrive” that can be accessed here.

Investors should be aware of updates to the end-stage renal disease (ESRD) payment system and incentive program released in a final rule by CMS on October 31. Changes in the final rule include:

  • Continuing a base reimbursement rate of $239.02 per dialysis treatment for renal dialysis services provided in calendar year 2015.
  • Delaying the incorporation of oral-only drugs into the ESRD prospective payment system until January 1, 2024, at the earliest.
  • Rebasing and revising the ESRD bundled market basket by blending two pharmaceutical price proxies.
  • For payment year 2017, removing one clinical measure, hemoglobin greater than 12g/dL, and the adoption of the standard readmission ratio, which assesses the rate of unplanned readmissions of ESRD patients to an acute care hospital within 30 days of an index discharge from an acute care hospital.
  • For payment year 2018, adding two new clinical measures, the standardized transfusion ratio and pediatric peritoneal dialysis adequacy, and three new reporting measures – pain assessment and follow-up, clinical depression screening and follow-up, and the National Healthcare Safety Network’s healthcare personnel influenza vaccination measure.
  • For payment year 2018, the mineral metabolism reporting measure will allow the submission of both serum phosphorus and plasma phosphorus measures.

White Paper: 7 Key Lessons for Dental Practice Management Companies from Corporate Integrity Agreements

Posted in Healthcare Services Investing

For the many investors who remain interested in dental practice management (DPM) businesses, we are sharing here a white paper authored by myself and our McGuireWoods colleagues Holly Carnell and Amanda Enyeart titled “7 Key Lessons for Dental Practice Management Companies from Corporate Integrity Agreements.”

To download the white paper, click here (pdf).

Healthcare Legal Update: Highlights from the 2015 OIG Work Plan

Posted in Healthcare Services Investing

Every fall, the OIG publishes its Work Plan for the coming year.  The Work Plan can provide useful insight into the specific area of enforcement for the OIG, which can help investors and companies better assess risk.

Our McGuireWoods colleagues recently published a short description of “hot topics” noted in the Work Plan. Access this summary here.

DaVita Agrees to $350 Million Settlement to Resolve Illegal Kickbacks Allegations

Posted in Healthcare Services Investing

DaVita Healthcare Partners has agreed to pay $350 million to resolve claims it violated the False Claims Act, according to a Department of Justice press release.

DaVita, which is based in Denver and has dialysis clinics in 46 states and the District of Columbia, was accused of paying kickbacks to induce the referral of patients to its dialysis clinics between March 1, 2005 and Feb. 1, 2014.

According to DOJ, DaVita is accused of identifying physicians or physician groups with patient populations suffering renal disease and offering them lucrative opportunities to partner with DaVita by acquiring and/or selling an interest in dialysis clinics to which their patients would be referred for dialysis treatment.

DaVita was accused of further ensuring referrals of these patients to the clinics through a series of secondary agreements with the physicians. These include entering into agreements in which the physician agreed not to compete with the DaVita clinic and non-disparagement agreements that would have prevented the physicians from referring patients to other dialysis providers.

PE investors have remained consistently interested in dialysis company investments and they should be aware of this recent settlement which impacts the structuring of dialysis JVs with physicians.

Healthcare & Life Sciences Private Equity Deal Tracker: VytronUS Secures $31.6 Million in Financing

Posted in Healthcare Services Investing

VytronUS has announced it has secured $31.6 million in an oversubscribed series B financing.

VytronUS, based in Sunnyvale, Calif., is a medical device company developing technologies for the treatment of cardiac arrhythmias.

The financing round was led by Apple Tree Partners, along with additional new investors, BioStar Ventures, Windham Venture Partners and a strategic investor alongside New Enterprise Associates and other existing investors.

VytronUS indicated the financing will be used for development and validation of VytronUS’s low-intensity collimated ultrasound cardiac imaging and ablation system designed to treat atrial fibrillation and other arrhythmias in forthcoming clinical trials.

Healthcare & Life Sciences Private Equity Deal Tracker: Invitae Secures $120 Million in Financing

Posted in Healthcare Services Investing

Invitae Corp. has announced it has raised $120 million in series F financing.

Invitae, based in San Francisco, is a genetic information company specializing in genetic diagnostics for hereditary disorders.

New investors participating in the round included The Broe Group, Decheng Capital, Deerfield Management, OrbiMed, Perceptive Advisors, Rock Springs Capital and Wellington Management Company. Existing investors participating in the financing included Casdin Capital, Genesys Capital, Genomic Health, Randy Scott, Redmile Group and Thomas McNerney & Partners.

Invitae indicated that it planned to use proceeds from the financing round to accelerate the build out of its infrastructure for its genetic information business and expand its global presence.