April
2006 issue
Ready for Retail Health Care? New Company
Secures Large Financing to Grow, Expand Rapidly
The biggest deal of the month is the first
institutional round for a company that plans to penetrate the retail-based
health care space.
...
Deals, Dollar Volume Up Again: Quarterly
and Monthly Results for Health Care Venture Capital
Results for the first quarter ended March 31, 2006 indicate that momentum
continues to build in the health care venture capital market.
...
Public Equity Market
Not many companies priced initial public offerings last month, but several
priced secondaries and other news kept the public equity market interesting
for health care.
...
Mergers and Acquisitions
Approximately $26.3 billion was committed to fund 73 mergers and
acquisitions in the health care sectors during March 2006, but one
multi-billion dollar deal eclipses the rest.
...
Private Equity Market
There were more financings announced by publicly traded companies than
private companies in the health care sectors during March, and the public
companies raised more total funding.
...
Notes & Briefs
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Companies Mentioned in this issue:
April 2006
3i Group p7
A
ABN AMRO Capital Life Sciences p7
Accentia Biopharm. p3
Accuitive Medical Ventures p8
Actavis Group p5
Adaltis Inc. p11
Adams Street Partners p8
Advanced Cell Tech. p3
Advanced Life Sciences p11
Advanced Magnetics p3
Affinergy p8
AGF Private Equity p8
Akorn p11
Alexza Pharmaceuticals p4
Allion Healthcare p5
Alloy Ventures p8
Alta Partners p7, p10
Amedica Corporation p8
American CareSource p11
American Retirement p5
AmerisourceBergen p5
AMN Healthcare p3
Amnis Corporation p8
Amorfix Life Sciences p11
Amphion Innovations plc p8
Amylin Pharmaceut. p3
Andrx Corporation p6
Antares Pharma p11
Applied DNA Sciences p11
Applied Imaging Corp. p11
APT Pharmaceuticals p8
Aptus Endosystems p8
Arbios Systems p11
ARCA Discovery p8
ARCH Venture Partners p8
Artes Medical p7
Ascension Health Ventures p7
Asenda Pharmaceutical p5
Astellas Venture Management p8
Athena Diagnostics p5
Atlas Venture p7
Atritech p8
Auriga Partners p8
Avalon Pharmaceuticals p11
Axis Three Ltd. p8
AxoGen p8
B
Baccala Realty p5
Baird Venture p8
Baker Brothers Investments p10
Banc of Amer. p3
BankInvest p8
BARRX Medical p5
Bartell Drugs p9
Bayer AG p6
BB Biotech p8
Bear, Stearns. p3
Beecken Petty O’Keefe & Co. p1
Bio Fund p7
Bio*One Capital p4
BioForce Nanosciences p11
Biofund Management p8
Bioject Medical Technol. p11
BioMarin Pharmaceu. p3
BioScrip, Inc. p5
BioSphere Medical p3
BioTrove, Inc. p8
BioXell p8
Blackmont Capital p11
Boulder Ventures p8
Brecon Pharmaceuticals p5
Brooks Eckerd Pharmacies p2
BVgroup Private Equity p8
C
C.E. Unterberg Towbin, LLC p11
C.R. Bard p5
Caffeine Awareness Alliance p12
Canaccord Adams p11
Capital Senior Living p5
Cardinal Health p5
Cardinal Partners p8
Cardiome Pharma p3
CardioVascular BioTher. p11
Cardium Therapeutics p5
Care Capital p4
Catalyst Health and Technology Partners p8
CB Health Ventures p7
Cell Genesys p9
CellCure Ltd. p8
Center for Venture Research at the University of N p12
CenterPoint Ventures p8
Cepheid p3
Cerus Corporation p3
Charter Life Sciences p8
CHG Hlthcare Svcs. p3
China Biopharmaceuticals p11
China Medical Tech. p3
Chronogen p8
CID Equity Capital p7
Citigroup Global Markets p3
Clarendon Fund Managers p8
Claris Lifesciences p8
CLONDIAG p5
Coloplast A/S p5
Columbia Laboratories p11
CombinatoRx, Incorporated p9
ComVest Investment p11
Corautus Genetics p3
Covalent Group p5
Covalys Biosciences p8
Cowen & Co. p3
Creation Capital p8
Credit Suisse p3
CVF, LLC p8
CVS p9
Cypress Surgery Center p5
Cytomics Systems p8
CytRx Corporation p11
D
Dansk Kapitalanlaeg p7
Danske Bank p7
Dawson James Securities p11
Debiopharm p8
Deerfield Management p10
deltaDOT Ltd. p8
Dermisonics, Inc. p11
Deutsche Bank p3
DrugMax p3
Dutchess Private Equities p11
Dyax Corp. p3
Dynavax p5
E
Echo Healthcare Acquisition Corp. p4
Edmond de Rothschild Investment Partners p8
Egalet a/s p7
EGS Private Healthcare Investors p7
EKOS Corporation p7
Elron Electronic Industries p8
Empire Asset Management p7
Endo Pharmaceuticals p4
EntreMed, Inc. p3
EP MedSystems p11
Evolved Nanomaterial Sciences p8
F
F2G Limited p8
Favrille, Inc. p9
Feder- ated Kaufmann Fund p10
FF&P Private Equity Limited p8
Fisher Scientific Intl. p5
Five Star Quality p3
Flagship Ventures p7
Formation Capital p4
G
Genizon BioSciences p8
Genta Incorporated p11
Getting Ready Corp. p11
Global Informatics p8
Global Life Science Ventures p7
Griffin Securities p11
Groupe CS Dermatologie p5
H
Hadasit Bio Holdings p8
Harris and Harris Group p8
HBM Bioventures p8
HealthExtras p3
HEALTHPOINT p5
Hearthstone Assisted Lvg. p5
Helicos BioSciences p7
Helix BioMedix p11
Highland Capital p7
I
Idera Pharmaceuticals p11
Ikonisys, Inc. p8
Imaging Diagnostics p11
Imperial Innovations p8
Index Ventures p7
InfaCare Pharmaceu- tical p7
InnerCool Therapies p5
InSite Vision Inc. p3
Insmed p3
Institute for Women’s Policy Research p12
Integrated Brand Solu. p5
InterFit Health p9
Intravenous Therapy Svs. p5
Intrexon Corporation p8
inVentiv Health p3
Inverness Medical p5
Invest Northern Ireland p8
Israel Seed Partners p8
J
Janssen Pharmaceutica p2
JMP p3
JMP Securities LLC p4
Johnson & Johnson p2
K
Kalorama Information p12
Kelso & Company p4
Kerr Drug Inc. p9
Keryx Biopharmaceuticals p9
King Pharmaceuticals p5
Kingsbridge Capital Limited p9
Kosan Biosciences p3
L
Ladenburg Thalmann & Co. p4
Laidlaw & Co. (UK) Ltd. p11
Lazard Capital p3
Lehman p3
LibertyView Capital Management p11
LINCO p5
M
Magen BioSciences p8
MEDIAN Technologies p8
Medical Present Value p8
MediGene AG p11
MediMin, Inc. p9
MedMira Inc. p11
MedVenture Associates p7
MedVenture Associates p8
Mentor p5
Merck p2
Merck KGaA p6
Meritech Capital p8
Merrill Lynch p3
Metabasis Therapeu. p3
Minute Clinic p9
Mistral Pharma p11
Mitsui & Co. Venture Partners p7
MMV Financial p8
Morgan Joseph & Co. p4
Morgan Stanley p3
Morgan Stanley Venture Partners p7
Morningside Venture Investments p11
Motif BioSciences p8
MPM BioEquities p10
MPM Capital p7, p8
N
NanoCarrier p8
Nanogen p3
National Securities Corporation p7
Nationwide Health p3, p5
NC IDEA p8
Neuralstem p8
Neuro Discovery p8
Neuromed Pharmaceuticals p8
NewVa Capital Partners p8
NGN Capital p7
Northstar Neurosci. p3
Northwest Biotherapeut. p11
NotreDame Capital p11
Novartis AG p5
Novartis Venture Fund p8
Novavax p11
Novelos Therapeutics p11
NuGEN Technologies p8
NuLens Limited p8
Nutrition Reviews p12
NYU Hospital for Joint Diseases p12
O
Oakwood Medical p7
Omrix Biopharmaceuticals p4
Oppenheimer & Co. p11
OptiCare Health Systems p5
Option Care p5
Oracle Healthcare Acquisition Corp. p4
Orbus Pharma p11
Osco Drug p2
P
Pacific Growth Equities p4
PanGenetics BV p8
PanOpSys p8
ParMed p5
Pequot Ventures p7
Pet Ecology Brands, Inc. p12
Pfizer p6
PharmaGap p11
Pharming p5
Pharmos Corporation p5
Picchio Pharma p11
Piper Jaffray p3
Polaris Venture Partners p8
Posco BioVentures p7
Prism Venture Partners p8
Proteon Therapeutics p8
PTC Therapeutics p3
Pure Bioscience p11
Q
QuatRx Pharmaceut. p3
QueQuin Holdings p7
Quester p8
R
RadPharm p8
Ranbaxy Laboratories p5
RBC Capital p3
RBC Capital Markets p4
Refac Optical Group p5
Regal One Corporation p8
RegeneRx Biopharmaceu. p11
Reliant Technologies p8
Remedium Oy p5
Research Corp. Technologies p8
Response Biomedical p11
Restore Medical p3
Retirement Residences p5
Revolution Health Group p9
Rhein Biotech p5
Rho Ventures p8
Rite Aid p2
Roaring Fork Capital p11
Robert W. Baird p3
Royal Philips Electron. p5
S
Sagamore Bioventures p7
Salick Cardiovascular p7
Sanders Morris Harris p11
sanofi-aventis p5
Santaris Pharma p7
Santarus p10
Schering AG p6
Sequenom p11
Sequoia Pharmaceuticals p8
Serologicals p5
Sherbrooke Capital p7
Sinclair Pharma p5
Sindan p5
Skilled Healthcare Gp. p5
Skyline Ventures p8
SmartCare Family Medical Centers p9
Somanetics p3
Sontra Medical p11
Sonus Pharmaceut. p3
Southridge Capital Management p11
Spectrum Pharmaceut. p5
SPEF Ventures p7
St. Simeon Lda p8
Steven D. Bell & Co. p5
Stryker Corporation p12
Sunesis Pharmaceuticals p9
Sunrise Senior Living p5
Sutter Hill Ventures p8
Symbion, Inc. p5
Synergos p5
T
T. Rowe Price Associates p10
T.R. Winston & Company p11
Take Care Health Systems p1
Tandem Health Care p4
Tang Capital Management p10
Tang Capital Partners p8
Targacept p4
Targeted Genetics Corp. p11
Terapia p5
The Carlyle Group p8
The Freedonia Group, Inc. p12
ThinkEquity Partners p3
Three Arch Partners p8
Titan Pharmaceuticals p11
TransMedics p7
Trellis Health Ventures p7
Trevi Health Ventures p8
Trinity Homecare p5
Tullis Dickerson p8
TVM Capital p8
U
U.S. Bureau of Labor Statistics p12
U.S. Vision p5
UBS Investment p3
UltraShape Inc. p8
Unigene Laboratories p11
Upstream Biosciences p5
V
Vaekstfonden p7
Valentis p11
Vanda Pharmaceuticals p4
VantagePoint Venture Partners p7
VC Arjent Ltd. p11
Vela Pharmaceuticals p5
Venetec International p5
Ventiv Health p5
Versant Ventures p7
Veterinary Pet Insurance p12
vFinance p11
Vigil Health Solutions p11
Viragen p11
ViRexx Medical Corp. p11
Viropro Inc. p11
Visicu p4
VM Capital p8
Volcano Therapeut. p3
W
W.R. Hambrecht p11
Warburg Pincus p7, p8
Watson Pharmaceuticals p6
WayPoint Biomedical p8
Whittier Goodrich p5
Wilmington Investor Network p8
Windrose Medical Properties Trust p9
Witt Biomedical p5
X
Xenomics p3
XTL Biopharmaceuticals p11 |
Ready for Retail Health Care? New Company
Secures Large Financing to Grow, Expand Rapidly
Email Editor
Take Care Health Systems LLC
secured the largest health care venture capital investment in March,
attracting $77 million in financing from Beecken Petty O’Keefe & Co.
(BPOC). Conshohocken, Pennsylvania-based Take Care Health Systems
offers diagnosis, treatment, screenings and vaccinations for common family
illnesses through its Take Care Health Centers, which are located within
retail pharmacies. Take Care accepts a variety of insurance plans that
operate in the areas where their clinics are located. And for uninsured
patients, the average visit often costs less than $70—less than what it
would cost out-of-pocket for a visit to an emergency room, and likely
faster too.
Greg Moerschel, a partner at BPOC, noted
that although the firm is not usually a major supporter of paradigm
shifts, the changes Take Care Health is implementing do resonate with an
imminent shift in the delivery of health care. Mr. Moerschel believes
that retail-based health care is certainly a vast, probably multi-billion
dollar market space, with room for two or three leading companies—and that
Take Care Health is one of them. Along with Peter Miller, Hal Rosenbluth
co-founded Take Care Health Systems as an LLC in 2004, and opened Take
Care Health Centers to patients in October 2005. Mr. Miller was formerly
the president of a Johnson & Johnson (NYSE: JNJ) company called
Janssen Pharmaceutica. He also ran the Tylenol business as well as a
joint venture between JNJ and Merck (NYSE: MRK), and he introduced
Splenda. Mr. Rosenbluth brings a unique perspective to the health care
industry, having spent most of his career outside it.
Mr. Rosenbluth expressed to us that one
passion he has in any industry is to do good while doing good business.
He sold his global travel business in 2003, after 29 years in the
industry, then spent about a year decompressing at his cattle ranch in the
Dakotas. A little sensory overload and a lot of brainstorming later, he
began to spot a decline in the ability to deliver quality health care in
America and elsewhere. He realized the system was unlikely to change from
within, partly because no benefit exists that would motivate payers and
providers, too vested in their businesses to make certain changes, to
shift the paradigm. He concluded that more personalization and less
victimization were essential to the patient experience, and realized that
his entry point into the health care industry would be to address the lack
of convenient access to quality primary care. Mr. Rosenbluth says that
his company is giving patients what they want, on their terms. He
emphasizes the delivery of elegant service, striving to offer
concierge-style services at affordable rates. Currently, Take Care Health
is working with Rite Aid (NYSE: RAD), Osco Drug and
Brooks Eckerd Pharmacies to open Take Care Health Centers, and plans
to operate over 1,500 centers in 70 markets by the end of 2008. Take Care
Health fits neatly into BPOC’s overall investment strategy, which targets
middle-market, growth and buyout opportunities in the health care services
sectors.
Certain groups of people, including
mothers with children, professionals with little time, people with common
ailments and the under-insured, comprise the core of the market that Take
Care Health Centers will serve. The company’s formula for success
includes embracing a highly trained, but underutilized element of the
health care work force, Nurse Practitioners (NPs), the heart and soul of
Take Care Health Centers. The NPs are backed by a proprietary information
management system that combines patient registration, NP-led diagnosis and
treatment through a clinical decision support system, and an automated
back-end billing and reimbursement system that enables patient discharge
instructions and documentation. About 10% of the patients seen at Take
care’s clinics will be turned away, sent to doctors or hospitals with
problems the NPs do not deal with. But if a patient is referred to a
physician that the company has a collaborative agreement with, the doctor
is obligated to see that patient the same day or within 24 hours. Take
Care has also arranged cross-referral programs with the emergency rooms in
the markets they serve and has established relationships with the
hospitals and doctors, perhaps relieving some of the strain placed on
emergency rooms by uninsured and underinsured patients, as well as
patients with common ailments.
Take Care Health Centers is one of the
few companies in this space that offers the ability to scale and
mass-markets to the target audience through television, radio and leaflets
in emergency rooms. The company has already built its infrastructure—with
a focus on leaders, people, speed and trust—for the purpose of rolling out
and growing the business. Take Care currently has nearly 20 clinics but
plans to open up to 200 over the next 12 months, in major metropolitan
areas in the Midwest and on the East Coast.
BPOC’s rationale for committing a
significant amount of capital to Take Care at the outset is that
management will be focused on keeping the company running smoothly, rather
than on getting capital. The capital may be drawn down as needed by Take
Care Health, and some portion of it may be used to make acquisitions of
companies that provide ancillary services that could be offered through
the clinics. Possible targets would include providers of disease
management or technology. BPOC’s partners have experience in retail
health care and multi-site roll-outs, so they will be able to help steer
the growth of the company as the infrastructure expands. From BPOC’s
perspective, the ideal exit strategy for this investment would be through
an initial public offering, or perhaps a sale to a strategic buyer.
But there are others in this space. Also
in March, Greenwood Village, Colorado-based SmartCare Family Medical
Centers announced it has partnered with Kerr Drug Inc. to open
medical centers in select Kerr Drug stores in North and South Carolina
during the second quarter of 2006. Formed in 2004, SmartCare has
partnerships in place to build 150 centers in the near term and plans to
become a major national presence by the end of 2009.
Other retail-based health care providers
include Minnesota-based Minute Clinic, which recently established
relationships with CVS (NYSE: CVS) and Bartell Drugs, and
MediMin, Inc. Then there is Revolution Health Group, which has
taken a minority stake in InterFit Health, a national provider of
health screening and immunizations delivered in retail outlets and at
employer worksites. RHG is providing the capital to support the roll-out
of InterFit’s RediClinics, which will provide treatment for routine
medical conditions, as well as screenings and tests, immunizations and
other preventive services.
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