The Health Care Investor

Radius Health Raises $43 Million in New VC Funding

Amber Walsh — Wed, 22 May 2013 21:43:07 -0500

Radius Health, Inc., has announced it has completed a new equity financing of $43 million.

Radius, based in a Cambridge, Mass., is a biopharmaceutical company focused on developing new therapeutics for the treatment of osteoporosis and other women's health conditions.

The financing was led by F2 Biosciences III, L.P. F2 is a family of life science funds established by Morana Jovan-Embiricos

Participation also came from the following existing investors: Biotech Growth N.V., MPM Capital, Brookside Capital, MPM Bio IV NVS Strategic Fund and BB Biotech Ventures.

Radius intends to use the funding to support its clinical development programs for BA058, the company's anabolic, bone-building compound developed for the treatment of patients with osteoporosis at high risk of fracture.

Physician-Owned Hospitals Continue Fight Against Restrictions

Amber Walsh — Thu, 16 May 2013 16:15:18 -0500

In a December report on hospital value-based purchasing from CMS, nine of the top 10 performing U.S. hospitals were physician owned, according to an American Medical News report. In fact, this list identified 48 physician-owned hospitals in the top 100.

Physician Hospitals of America (PHA) President Paul Kerens noted in a recent issue of PHA ePulse, PHA's e-publication, that the new quality data from CMS that shows physician-owned hospitals "very favorably" will be included in the association's efforts on the Hill.

Despite this impressive performance by the small industry (there are less than 240 physician-owned hospitals nationwide), there are serious limitations on expansion of existing and development of new physician-owned hospitals due to changes to the Stark Law included in the Patient Protection and Affordable Care Act (PPACA).

The physician-owned hospital industry, led by advocacy association PHA, has fought against the 2010 PPACA-imposed limitations, including the various predecessor provisions appearing in bills that pre-dated PPACA. Supporters of physician-owned hospitals continue to seek ways that the restrictions can be legislatively refined into more manageable provisions that are good for clinical care and the broad hospital industry generally.

Healthcare & Life Sciences Private Equity Deal Tracker: Harvest Partners Acquires AxelaCare

Geoff Cockrell — Wed, 15 May 2013 09:33:54 -0500

Harvest Partners, LP, has announced it has acquired AxelaCare Holdings, Inc., from Excellere Partners.

Harvest Partners is a middle-market PE firm based in New York.

AxelaCare, based in Lenexa, Kansas, is a full-service home infusion therapy provider.

Excellere Partners is a middle-market PE firm based in Denver.

Financial terms were not disclosed.

Healthcare & Life Sciences Private Equity Deal Tracker: Argon Medical Devices Completes Acquisition of Angiotech Pharmaceuticals Subsidiary

Amber Walsh — Wed, 08 May 2013 06:47:55 -0500

Argon Medical Devices has completed its acquisition of the interventional products business of Angiotech Pharmaceuticals Inc., according to a news release.

Argon Medical Devices, based in Plano, Texas, is a manufacturer of specialty medical products, in areas including interventional radiology, vascular surgery, interventional cardiology and critical care procedures. It is a portfolio company of Lake Forest, Il.-based PE firm RoundTable Healthcare Partners.

Angiotech Pharmaceuticals, headquartered in Vancouver, British Columbia, Canada, develops, manufactures and markets medical devices primarily within the areas of interventional oncology, wound closure and ophthalmology.

Financial terms of the acquisition were not disclosed.

Healthcare & Life Sciences Private Equity Deal Tracker: Carestream Health Bidders Down to Bain and Thomas H. Lee

Geoff Cockrell — Wed, 08 May 2013 06:46:39 -0500

Bain Capital LLC and Thomas H. Lee Partners are the two remaining bidders for Carestream Health Inc., according to a Reuters report.

Carestream Health, headquartered in Rochester, N.Y., is a worldwide provider of dental and medical imaging systems and healthcare IT solutions; x-ray film and digital x-ray systems for non-destructive testing; and advanced materials for the precision films and electronics markets.

The company was formed in 2007 when Onex Corporation, a Toronto-based PE firm, acquired Eastman Kodak Company's Health Group and renamed the business as Carestream Health.

Bain Capital and Thomas H. Lee Partners are both PE firms based in Boston.

The auction of Carestream had also drawn interest from Carlyle Group LP, , Hellman & Friedman LLC and KKR & Co LP, according to earlier reports.

The deal could be valued at upwards of $3.5 billion.

Healthcare & Life Sciences Private Equity Deal Tracker: Sarnova Acquires Progressive Medical International

Amber Walsh — Thu, 25 Apr 2013 09:45:07 -0500

Sarnova, Inc. has announced it has acquired Progressive Medical International Inc.

Sarnova, based in Dublin, Ohio, is a specialty distributor of healthcare products in the EMS and acute care markets.

Progressive Medical International, based in Vista, Calif., distributes new and refurbished EMS equipment and supplies.

Financial terms were not disclosed.

This is the sixth acquisition for Sarnova since Water Street Healthcare Partners invested in the company in 2008.

Water Street Healthcare Partners, based in Chicago, is a strategic PE firm focused exclusively on health care.

Healthcare & Life Sciences Private Equity Deal Tracker: Infinity Homecare Acquires Vitalcare Home Health

Geoff Cockrell — Mon, 22 Apr 2013 11:33:15 -0500

Infinity Homecare, LLC has announced it has completed its acquisition of Advanced Homecare, LLC and AHC Southwest LLC (collectively, "Vitalcare").

Infinity Homecare, headquartered in Sarasota, Fla., provides home health services in Florida through licensed and Medicare-certified agencies.

Vitalcare Home Health, headquartered in Tampa, Fla., provides home health services including nursing and rehabilitation services as well as specialty programs.

Financial terms were not disclosed.

Infinity Homecare is a portfolio company of HealthEdge Investment Partners, a PE firm headquartered in Tampa, Fla., that focuses exclusively on the healthcare industry.

Three Hot Button Issues for Ambulatory Surgery Center Investments

Amber Walsh — Fri, 19 Apr 2013 06:23:34 -0500

We have previously posted links to the monthly column that we write for Law360. This month we co-authored a piece with our partner Bart Walker addressing three current legal issues in ASC investments. The article discusses three legal issues garnering a lot of attention in the industry and is available here at http://www.law360.com/articles/432790/3-trapdoors-in-surgery-center-investing .

Our firm, especially with our partner Scott Becker, has significant experience representing ambulatory surgery centers, surgical hospitals and similar outpatient surgical providers as well as lenders and private equity investors in the space. If you are interested in discussing these issues, attending our upcoming conferences or listening to a recent webinar we hosted on ASC issues with industry leaders, please contact me.

Healthcare & Life Sciences Private Equity Deal Tracker: Water Street Healthcare Partners Acquires CCBR-SYNARC

Geoff Cockrell — Thu, 11 Apr 2013 21:53:03 -0500

Water Street Healthcare Partners has announced it has acquired CCBR-SYNARC.

CCBR-SYNARC is a provider of clinical services to pharmaceutical and biotechnology companies. The company's SYNARC business, based in Newark, Calif., specializes in imaging services, consultation and analysis to track progress throughout a clinical trial's life cycle. The CCBR business, based in Copenhagen, Denmark, recruits patients and conducts and manages clinical trials in its dedicated clinical centers.

Water Street Healthcare Partners, based in Chicago, is a strategic PE firm focused exclusively on healthcare.

No financial terms were disclosed.

Healthcare & Life Sciences Private Equity Deal Tracker: Carestream Health Drawing Interest From PE Firms

Amber Walsh — Wed, 10 Apr 2013 08:44:56 -0500

Carestream Health is drawing interest from several private equity firms, according to a Reuters report.

The company was formed in 2007 when Onex Corporation, a Toronto-based PE firm, acquired Eastman Kodak Company's Health Group and renamed the business as Carestream Health.

The auction of Carestream has drawn interest from Bain Capital LLC, Carlyle Group LP, Thomas H. Lee Partners, Hellman & Friedman LLC and KKR & Co LP, according to the report.

The deal could be valued at upwards of $3.5 billion.

Healthcare & Life Sciences Private Equity Deal Tracker: Grifols Acquires 60% of Spanish Biotech Firm Progenika

Geoff Cockrell — Mon, 01 Apr 2013 10:36:26 -0500

Grifols has announced it has acquired 60 percent of Spanish biotechnology firm Progenika Biopharma.

Grifols, headquartered in Barcelona, Spain, is one of the world's largest producers of plasma medicines.

Progenika, headquartered in Vizcaya, Spain, designs, produces and commercializes in vitro diagnostics tests.

Grifols acquired the majority stake in Progenika for 37 million Euros (~$48 million).

Healthcare & Life Sciences Private Equity Deal Tracker: Heart to Heart Hospice Secures Investment from Summit Partners

Amber Walsh — Thu, 28 Mar 2013 16:42:02 -0500

Heart to Heart Hospice has received a minority investment from Summit Partners.

Heart to Heart Hospice, based in Plano, Texas, is a provider of hospice care in Texas.

Summit Partners, which has its U.S. office in Boston, is a growth equity firm.

Healthcare & Life Sciences Private Equity Deal Tracker: Dynamic Healthcare Services Acquires APO2

Geoff Cockrell — Tue, 26 Mar 2013 13:42:17 -0500

Dynamic Healthcare Services Inc. has announced it has acquired APO2.

Dynamic Healthcare Services, based in Irvine, Calif., is a provider of home medical equipment, respiratory therapy products and services, along with complex rehabilitation products and services. It is a portfolio company of GMH Ventures, a private equity group headquartered in Newtown Square, Pa.

APO2, based in Hazleton, Pa., is a provider of home oxygen delivery systems, CPAP, sleep apnea products and consumer power mobility products.

Financial terms were not disclosed.

Biotech M&A May See Boost in 2013

Amber Walsh — Fri, 22 Mar 2013 06:00:36 -0500

The biotech field may see an increase in M&A in 2013, according to a Boston Business Journal report.

Contributing factors include expiring patents on notable drugs (such as the recent expiration of the Lipitor patent and expected 2014 expirations of Cymbalta and Nexium patents) and large drug companies cutting their research and development budgets, with acquisitions as a means to make up for possible lost revenue.

An M&A report from HBM Partners, an investment firm based in the Cayman Islands, concluded that 2012 was a strong year for trade sales of North American and European biotech companies. And according to an Ernst & Young news release, the financial capacity of big biotech to conduct deals increased 61% between 2006 and 2012.

We will continue to track private equity activity in the space in our Deal Tracker.

Healthcare & Life Sciences Private Equity Deal Tracker: IMS Health Acquires Appature

Amber Walsh — Wed, 20 Mar 2013 07:15:21 -0500

IMS Health has announced it has acquired Appature.

IMS Health, which has its global headquarters in Danbury, Conn., is a provider of healthcare information, technology and services.

Appature, based in Seattle, is a software-as-a-service company. Xconomy reports Appature had raised almost $10 million in two financing rounds from venture capital firms Madrona Venture Group, based in Seattle, and Ignition Partners, based in Bellevue, Wash.

Geekwire reports the deal's value exceeded $100 million.

Jury Orders DePuy to Pay $8.3M in Hip Implant Lawsuit

Geoff Cockrell — Mon, 18 Mar 2013 15:46:26 -0500

A Los Angeles jury has awarded $8.3 million to a Montana man who sued Johnson & Johnson's DePuy Orthopaedics on claims he was injured by the company's now-recalled ASR (Articular Surface Replacement) XL metal hip implant, according to a New York Times report.

The jury did not award any punitive damages. This is the first of more than 10,000 lawsuits pending against the company related to the ASR implant, which was recalled in mid-2010.

There are a number of reasons why private equity interest in medical devices has waned in recent years (as discussed in prior The Healthcare Investor posts). Although suits like these can also have a chilling effect, there are still private equity funds that remain interested and focused on medical device opportunities.

Private Equity Interest in the Dialysis Sector Continues to Thrive

Amber Walsh — Sun, 10 Mar 2013 22:12:44 -0500

Geoff Cockrell and I recently co-authored an article on private equity investments in the dialysis sector in Law360 (a LexisNexis legal publication). A copy of the article is attached here.

One of the featured dialysis companies with private equity backing is American Renal Associates (ARA). ARA is fourth largest dialysis company in the US, after public companies Fresenius and Davita and not-for-profit provider DCI. ARA has dialysis facilities located in 19 states across the country and Washington, D.C., owning and managing more than 120 facilities in a purely physician joint venture model and serves over 8,000 patients. In 2010, private equity firm Pamlico Capital (formerly Wachovia Capital Partners), completed the sale of ARA’s affiliate American Renal Holdings (ARH). to Centerbridge Partners.

The other major PE-backed players in the industry are also descirbed more fully in the article.

Healthcare & Life Sciences Private Equity Deal Tracker: SpinalMotion Completes $15 Million Debt Financing Round

Geoff Cockrell — Wed, 27 Feb 2013 19:20:50 -0500

SpinalMotion has completed the fourth and final round of a $15.1 million debt offering, according to a MassDevice report.

SpinalMotion is a Mountain View, Calif.-based developer of spine artificial discs that manufactures the Kineflex line of cervical disc implants, which includes the Kineflex Disc (lumbar) and the Kineflex|C Disc (cervical).

The $15.1 million raised came from 15 unnamed investors.

Healthcare & Life Sciences Private Equity Deal Tracker: Oceans Healthcare Closes $17 Million Round of Strategic Growth Equity Financing Round

Amber Walsh — Mon, 25 Feb 2013 22:36:02 -0500

Oceans Healthcare has announced it has raised $17 million in growth equity funding.

Oceans Healthcare is a Louisiana healthcare company that specializes in the development and management of behavioral health services. It is based in Lake Charles, La.

The financing, which Oceans Healthcare said will be used to capitalize the organization as a foundation for expansion, was provided by General Catalyst Partners.

General Catalyst Partners is a Cambridge, Mass.-based venture capital firm focusing on early stage and growth equity investments.

CMS Announces ESRD Comprensive Care Initiative

Amber Walsh — Mon, 25 Feb 2013 22:16:05 -0500

The Centers of Medicare & Medicaid Services (CMS) has consistently stated that it does not anticipate approving specialty accountable care organizations. Thus it is no surprise that CMS has been reluctant to call the new ESRD Seamless Care Organization (ESCO) a "renal ACO" or "renal accountable care organization" and in many ways the new program does differ from the ACO shared savings program. Like many U.S. healthcare sectors, various players within the continuum of care are exploring ways to affiliate to lower costs and enhance quality. The ESCO is surely an option that dialysis companies and nephrologists will investigate, although it remains to be seen how viable the program truly is.

In a recent publication, our McGuireWoods colleagues Jim Riley, Jason Greis and Scott Downing, describe the ESCO and the new CMS pilot program to test the renal coordinated care concept.