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The Healthcare Investor

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

Five Urgent Care Models To Know For 2015

Posted in Healthcare Services Investing

Below is a link to view the latest entry from the monthly Law360 that we publish relating to healthcare private equity investments. This column was written by Geoff C. Cockrell and Amber McGraw Walsh, McGuireWoods LLP, together with Hunter Atkins of Allen Mooney & Barnes Brokerage Services.

In the Law360 column, we identify five operating models in the urgent healthcare industry: the pure-play model, the rural model, the hybrid model, the pediatric model and the onsite model. Private equity investors have renewed interest in urgent care, and this seems to be an upcycle in urgent care interest similar to what we saw in 2012-2013.

View the Law360 column “Five Urgent Care Models To Know For 2015.”

Healthcare & Life Sciences Private Equity Deal Tracker: Precision BioSciences Secures $25.6 Million in Financing

Posted in Life Sciences Investing

Precision BioSciences has announced it has secured $25.6 million in series A financing.

Precision BioSciences is a Durham, N.C.-based genome editing company. Its ARCUS genome editing technology is designed to produce nucleases that can insert, remove and modify DNA in a complex genome.

The funding round involved Fidelity Biosciences, Amgen Ventures, Baxter Ventures, Osage University Partners, the Longevity Fund and two public market investors.

As Precision’s CEO Matthew Kane indicated in a news release, “This financing will allow us to expand beyond our successful efforts to develop the leading next-gen genome editing platform and significantly accelerate the development of our genome-edited product pipeline.”

Healthcare & Life Sciences Private Equity Deal Tracker: Moximed Secures $33 Million in Financing

Posted in Healthcare Services Investing

Moximed has announced it has secured approximately $33 million in funding.

Moximed, based in Hayward, Calif., is focused on developing minimally invasive, joint preserving solutions for patients with knee osteoarthritis.

The funding round included new investor Vertex Venture Holdings and returning investors New Enterprise Associates, Gilde Healthcare Partners, Morgenthaler Ventures and GBS Venture Partners.

Moximed indicated the funding will go toward the company’s efforts to gain FDA approval of the KineSpring System, a joint unloading knee implant for pre-arthroplasty patients, and grow commercial sales in Europe.

Healthcare & Life Sciences Private Equity Deal Tracker: Rapid Micro Biosystems Secures $25 Million in Financing

Posted in Healthcare Services Investing

Rapid Micro Biosystems has announced it has secured $25 million in series C funding.

Rapid Micro Biosystems, based in Lowell, Mass., develops imaging technology that detects microbial contamination in the manufacture of pharmaceutical, biotechnology and other products

The financing round involved new investors Hepalink USA and Richard K. Mellon and Sons, along with continued participation from Kleiner Perkins Caufield & Byers, Longitude Capital, Quaker Partners, TPG Biotech and TVM Capital.

Rapid Micro Biosystems indicated the funding will go toward expanding global commercial and manufacturing operations in support of its Growth Direct System across the applications of environmental monitoring, sterility and bioburden testing. The Growth Direct System consists of an automated imaging instrument that analyzes user-prepared proprietary consumables.

Healthcare & Life Sciences Private Equity Deal Tracker: Spirox Secures $18.5 Million in Financing

Posted in Healthcare Services Investing

Spirox has announced it has secured $18.5 million in series B funding.

Spirox, based in Menlo Park, Calif., develops minimally invasive technologies to treat nasal obstruction.

The financing round was led by Venrock and Aisling Capital. Existing investors Aperture Venture Partners, Correlation Ventures and Western Technology Investment also participated.

Spirox indicated the funding will go toward completing development of a minimally invasive system to be used by ENT physicians and plastic surgeons to treat nasal obstruction, seeking U.S. marketing authorization and initiating product commercialization.

New Enterprise Associates Closes New $2.8 Billion Fund

Posted in Healthcare Services Investing

New Enterprise Associates (NEA) has announced it has closed its fifteenth fund — New Enterprise Associates 15 LP — with $2.8 billion in committed capital.

An additional $350 million is committed for NEA 15 Opportunity Fund, a co-investment fund.

NEA, which has its headquarters in Chevy Chase, Md., is a global VC firm focusing on investments in technology and healthcare companies at all stages in a company’s lifecycle, from seed stage through IPO. The firm’s history includes more than 200 portfolio company IPOs and more than 320 acquisitions.

In an interview with MedCity News, NEA partner Justin Klein indicated that NEA traditionally invests 30-40% of its funds in healthcare. Within that, 50-60% go to biotech and therapeutics, 25-35% go into medical devices and healthcare tech, with the remainder in healthcare services and IT.

He said subsectors that are most compelling for NEA include peripheral vascular disease, electrophysiology and treatment of atrial fibrillation in medical devices and immuno-oncology, gene therapy and CRISPR in biotech.

This latest round of fundraising brings the firm’s cumulative committed capital since its founding nearly 40 years ago to nearly $17 billion.

Health Diagnostics Laboratory Agrees to Pay $47 Million to Settle Claims

Posted in Healthcare Services Investing

Health Diagnostics Laboratory (HDL) of Richmond, Va., has agreed to pay $47 million to resolve allegations it violated the False Claims Act by compensating physicians for ordering tests, according to a U.S. Department of Justice news release.

Laboratory Singulex of Alameda, Calif., has also agreed to pay $1.5 million to resolve similar allegations.

As alleged in the lawsuits, physicians were induced to refer patients to HDL, Singulex and a third laboratory for blood tests by paying them processing and handling fees of between $10 and $17 per referral and routinely waiving patient co-pays and deductibles.

Physicians allegedly referred patients to these labs for medically unnecessary tests, which were then billed to federal healthcare programs.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federally funded programs. The law is intended to ensure a physician’s medical judgment is based on the best interests of patients and not compromised by improper incentives.

HDL and several other labs have been under investigation by the Office of Inspector General and DOJ for many months, as we previously reported.

We have discussed regulatory issues with investing in clinical laboratories in the past, and will continue to cover this topic in future blog posts and a Law360 column.

Healthcare & Life Sciences Private Equity Deal Tracker: Livongo Health Secures $20 Million in Financing

Posted in Healthcare Services Investing

Livongo Health has announced it has secured $20 million in series B funding.

Livongo, with offices in Chicago and Mountain View, Calif., is a developer of chronic disease management tools, including a cloud-enabled glucose meter.

Participating investors included Kleiner Perkins Caufield & Byers, DFJ and previous investor General Catalyst.

Livongo indicated the funding will go toward further developing the company’s chronic disease management ecosystem and accelerating the adoption of the company’s digital diabetes management program, Livongo for Diabetes, among self-insured employers, healthcare providers and payers.

Lux Capital Raises $350 Million Fund to Back Startup Healthcare and Technology Companies

Posted in Healthcare Services Investing

Lux Capital has announced it has closed a new $350 million fund that will invest in early-stage science and technology ventures.

Lux Capital, with offices in New York and Menlo Park, Calif., invests in counter-conventional, seed and early stage science and technology ventures. It was co-founded by Peter Hebert, Robert Paull and Josh Wolfe in 2000.

The new fund — Lux Ventures IV — brings the firm’s total capital under management to $700 million.

Among Lux Capital’s current healthcare investments include Kala Pharmaceuticals, clinical stage pharmaceutical company focused on treatments for ocular diseases; 3Scan, which develops 3D brain scans and digital organ reconstruction; and Aptible, a cloud-based platform designed to automate HIPAA compliance.

Tenet and USPI to Form Ambulatory Surgery Joint Venture

Posted in Healthcare Services Investing

Tenet Healthcare Corp. has announced it has signed a definitive agreement with United Surgical Partners International (USPI) to combine their short-stay surgery and imaging center assets into a new joint venture.

Tenet will initially own 50.1% of the joint venture, which will be the largest provider of ambulatory surgery in the United States. Private equity investor Welsh Carson and the other existing investors in USPI will initially own the remaining 49.9%.

Tenet will have the ability to acquire USPI over the next five years.

The joint venture, which will maintain the USPI brand, will have ownership interests in 244 ambulatory surgery centers, 16 short-stay surgical hospitals and 20 imaging centers in 29 states.

In a separate transaction, Tenet entered into an agreement to acquire Aspen Healthcare from Welsh Carson. Aspen operates nine private hospitals and clinics in the U.K. USPI owned Aspen until a restructuring of the USPI group in 2012, which resulted in Aspen becoming an independent company majority owned by Welsh Carson.