February 2008 issue
Successful IPO In Emerging Specialty--
Growing Hospitalist Company Prices Initial Public Offering
Only one health care company priced an initial public offering during
January, but it was a successful one and in an emerging specialty market.
...
Imaging Space Hot During 2007--
Venture Capital Funding Increases, Continuing In 2008
Companies that are active in, or working to enter, the imaging market
attracted more funding in 2007 than previous years, and deals have already
been made in this space in 2008.
...
Public Equity Market
In addition to one IPO getting priced in January, more new filings were
submitted by health care companies that are planning to go public.
...
Mergers & Acquisitions
The month was not without its billion-dollar deals, as well as a relatively
steady stream of others, in the health care merger and acquisition market.
...
Venture Capital Transactions
Health care opportunities continue to attract venture capital funding, with
biotechnology and medical device companies announcing more than half the
deals recorded for January.
...
Private Placement Market
The first month of the year was rather slow going for private investments in
public health care companies, and the largest deal of the month was
announced by a company with a cosmetic device.
...
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Companies Mentioned in this issue:
February 2008
Symbols
3i Group p11
A
Abingworth Management p11
Accentia p15
Access Pharmaceuticals p15
Accuro Healthcare Solutions p4
Adept Technology p7
Advancis p12
Advantage Capital p11
AgeChem Venture Fund p10
Aisling Capital p10
Akela Pharma p3
Alafi Capital p9
Alder Biopharmaceuticals p10
Alliance Bernstein p9
Allscripts Healthcare p7
Alta Partners p10
Amelia Trace p8
American Capital p10
AppTec Laboratory p7
Aragon Surgical p10
Aravis Ventures p3
Arbor Surgical Technologies p11
ARCH Venture Partners p3
Arcion Therapeutics p11
Ardea Biosciences p4
Ark Therapeutics p7
Artes Medical p12
Ascension Health Group p9
Ascension Orthopedics p11
Aspen BioPharma p4
Associates p10
AthenaHealth p4
Avalon Laboratories p10
Avid Radiopharmaceuticals p9
B
Bay City Capital p10
Bayhill Therapeutics p3
Benvenue Medical p11
Bessemer Venture Partners p3
BG Medicine p3
BioAdvance p9
Biodel p4
BIOMEC p6
BioSpecifics Technologies p15
Bridge Laboratories p11
Brooke Private Equity p11
BTF B.V. p10
C
CafeScribe p16
Calistoga Pharmaceuticals p11
Caprotec Bioanalytics p11
Cardiovascular Systems, Inc. p3
Cardium Therapeutics p15
CB Health Ventures p3
Cellectar p9, p11
CellzDirect p7
Cerebellum Automation p7
Channel Medical Partners p11
Chengdu Tianyin Pharmaceutical p14
Children’s Hospital of Pittsburgh at UPMC p16
CHL Medical Partners p14
Circassia p11
Citi p3
Clarus Ventures p11
Clinipace p11, p12
CMEA Partners p11
CMEA Ventures p3
CMS p7
CoGenesys p7
Confirma p9, p11
Cowen Group p12
Cowen Healthcare Royalty Partners p12
Creadev p10
Creathor Venture p11
Credit Suisse p1
CyberHeart p11
D
De Novo Ventures p3
Deerfield Management p12
Delphi Ventures p10
Deutsche Bank Securities p3
E
Early Stage Partners p6
Eastman Kodak p9
Elbit Medical Imaging p6
ElectroSonics Medical p6
Elekta p7
Eli Lilly and Company p3
Emergent Growth Fund p12
Emergent Medical Ventures p11
Empire Asset Management p15
Endeavour Vision p10
Endotis Pharma p10
EnzySurge p11
Extended Care p7
F
Fidelity Asia Ventures p11
Fidelity Biosciences p10, p11
FinTech Laboratories p7
Flagship Venture Partners p11
Fluke Venture Partners p11
Follica p11
Food and Drug Administration p16
Franklin & Seidelmann p9
Frazier Healthcare Ventures p11
Frontier Capital p11
G
Galen Partners p6
Galpharm Healthcare p7
GE Capital Equity Holdings p6
GE Healthcare p9
Gelesis p11
Genizon BioSciences p10
Goldman, Sachs p11
Gottlieb Memorial Hospital p8
H
H. Lundbeck A/S p7
H.I.G. Ventures p10
Hatteras Venture Partners p11
Health-E-tips p16
Heidelberg Innovation p11
Heraeus Holding p7
I
IBB Beteiligungsgesellschaft p11
Imalux Corporation p6
ImmuneRegen Biosciences p15
Inclinix p11
InnerCool Therapies p15
InSightec Image Guided Treatment p6
Integral Capital Partners p10
Intel Capital p10
InterWest Partners p11
Invesco Perpetual p11
Invitrogen p7
IonGate Biosciences p11
IPC The Hospitalist Company p1
Ivy Healthcare Capital p6
J
Jefferies & Company p1
Journal of the American Medical Association p2
JW Medical Systems p7
K
Kearny Venture Partners p10
KfW p11
Kleiner Perkins Caufield & Byers p10
Knopp Neurosciences p11
Kramer Capital Partners p11
KRC Research p16
KV Pharmaceutical p7
L
Latterell Venture Partners p3
Lazard Capital Markets p3
Leerink Swann p3
Lifecore Biomedical p7
Lincoln Funds p11
Loyola p8
Lymphatix Oy p7
M
MAKO Surgical p4
Mamea p9
Mauna Kea Technologies p9
MC Life Science Ventures p10
MDS Capital p9
MedeFile p15
MediTech Advisors p6
Medtronic p11
MiddleBrook Pharmaceuticals p12
Mohr Davidow Ventures p10
Montreux Equity Partners p3
Morgan Stanley p3
Morgenthaler Venture Partners p3
MPM Capital p11
N
National Association of Inpatient Physicians p2
National HealthCare p8
Needham & Company p3
New England Journal of Medicine p2
New Enterprise Associates p11, p15
NIF SMBC Ventures p10
North American Scientific p14
NovaMed p8
NovaMed Pharmaceuticals p11, p12
Nura p3
Nymox Pharmaceutical p14
O
Oak Investment Partners p9
Odyssey HealthCare p8
Olympus Medical Systems p9
Omeros Corporation p3
ONI Medical Systems p6
ONSET Ventures p10
OrbiMed Advisors p10, p11
Orexigen p3
P
Pacific Growth Equities p3
Par Pharmaceutical p7
Paul Capital p12
Paul Royalty Funds p12
Peptimmune p11
Pervasis Therapeutics p11
Pfizer p7
Pfizer Strategic Investment Group p9
Pharmos p15
Phenomix p4
Polaris Venture Partners p11
Pomeroy Health p8
Primera Biosystems p11
ProtAffin Biotechnologie p11
Psilos Group p10
Public Citizen p16
PureTech Ventures p11
R
Radius Ventures p9
RadPharm p9
Raygere p14
Renaissance p8
Rexahn p15
Rigel Pharmaceuticals p3
RK Ventures p9
Rodman and Renshaw p14
rontier Capital p11
Royal Senior Care p8
RxElite p7
S
Saturn Partners p11
Scale Venture Partners p3, p10
Seattle Genetics p3
Sectra AB p9
Senexis p11
Sepracor p7
Seventure Partners p10
Sevin Rosen Funds p10
SF Capital Partners p14
Siemens Venture Capital p9
Sinovac Biotech p15
Sofinnova Partners p10
Sonexa Therapeutics p10
St. Mary’s Holston Health p8
STAAR Surgical p4
Stanley Medical Research Institute p3
Sterling at Aventura p8
Susan G. Komen for the Cure p16
Susan G. Komen for the Cure Advocacy Alliance p16
SV Life Sciences p11
Sycamore Venture Partners p9
Symark p6
Synecor p11
Synovis p7
T
Targacept p3
Telegraph Hill Partners p11
Tempo Pharmaceuticals p11
Tethys Bioscience p10
Teva Pharmaceutical p7
The Buying Group p8
The Endeavors Group p9
The Entrepreneurs Fund p11
The Perrigo Company p7
The Society of Hospital Medicine p2
Three Arch Partners p11, p14
Tissue Repair Company p15
Titan Pharmaceuticals p4
TomoTherapy p9
TransEnterix p11
Transoma Medical p4
TriPoint Global Equities p14
U
U-Systems p6
U.S. Venture Partners p3
UHS-Pruitt p8
Ulthera Therapeutics p11
United Investments p11
V
VenRock Associates p15
Venture Investors p11
Ventures West p10
Versant Ventures p11
ViewRay p9
ViOptix p11
VisCorp p14
VistaCare p8
W
Wachovia Capital Markets p1
Wellcome Trust p10
Welsh Carson Anderson & Stowe p4
Whitley Place p8
William Blair & Company p1
WRF Capital p10
WuXi PharmaTech p7
Y
YA Global Investments p15
Yorkville Advisors p15
Z
Ziegler Meditech Equity Partners p6
Zogenix p11 |
Successful IPO In Emerging Specialty--
Growing Hospitalist Company Prices Initial
Public Offering
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IPC The Hospitalist
Company (NASDAQ: IPCM) is the only health care company that priced an
initial public offering during January 2008. In the first five days it was
on the market, IPC’s stock price increased 31% over the IPO price of
$16.00 per share, closing the month at $21.02 per share. Credit Suisse
and Jefferies & Company acted as joint book-runners and
Wachovia Capital Markets and William Blair & Company acted as
co-managers for the IPO, which included 3,300,000 shares offered by IPC
and 1,900,000 shares, and an over-allotment option of 705,000 shares
offered by selling shareholders.
Founded in 1995, IPC The Hospitalist Company is in the business of helping
hospitals and payors improve the quality of inpatient care while
increasing operating efficiencies and reducing costs. The company employs
physicians called hospitalists, who manage and coordinate the care of
hospitalized patients and act as the inpatient partner to primary care
physicians and specialists. Currently, IPC has more than 550 hospitalists
delivering care at over 300 medical facilities in 18 states.
IPC recently cited that according to a 2002 study published in the Journal
of the American Medical Association, hospitalist programs have resulted in
an average 13.4% reduction in hospital costs and an average 16.6%
reduction in the average length of a patient’s hospital stay. Currently,
the majority of hospitalists practice in acute care hospitals, while
others work at inpatient facilities, including long-term acute care
facilities, specialty hospitals, psychiatric facilities, rehabilitation
hospitals and skilled nursing facilities.
IPC’s annual net revenue has nearly tripled in recent years, from $54
million in 2002 to $148.1 million in 2006. For the nine months ended
September 30, 2007, IPC posted net revenue of $137.4 million. The
company’s operating expenses for that period, including physician practice
salaries and benefits, amounted to $100.9 million. During the same nine
months, IPC reported close to 1.6 million encounters with patients.
The Society of Hospital Medicine (SHM), a national medical society
devoted entirely to hospitalists and the hospital medicine movement, was
originally founded in 1997 as the National Association of Inpatient
Physicians. Headquartered in Philadelphia, Pennsylvania, SHM is
dedicated to supporting and enhancing the practice of hospitalists, and
offers courses, publications, surveys and reference material to its
members. The group aims to promote the highest quality care of
hospitalized patients and to promote excellence in the practice of
hospital medicine through education, advocacy and research. SHM is
currently working with more than 6,000 member hospitalists.
In a recent press release, SHM cited a study published in the New England
Journal of Medicine that looked at 76,926 patients at 45 hospitals treated
by hospitalists, general internists and family physicians between
September 2002 and January 2005. The study showed that those patients
cared for by hospitalists had a 0.4 day shorter stay than those patients
treated by general internists and family physicians. According to SHM,
hospital medicine is currently the fastest-growing medical specialty in
the U.S., with today’s 20,000 hospitalists projected to grow to about
30,000 by the end of the decade. In addition, it was found that patients
cared for by hospitalists had lower hospital costs—for example,
approximately $268 lower than general internists and $125 lower than
family physicians. The inpatient mortality and 14-day readmission rate for
hospitalists’ patients were the same as those treated by general
internists and family physicians.
Although some doctors have practiced in this specialty area since the
1970’s, it was in 1996 that the term hospitalist was coined. By 1998, the
demand for hospitalists exceeded the supply of doctors trained for the
job. Among other advantages that doctors see in this career path, a
hospitalist can be busy on the first day of work, instead of spending the
time it takes to build an office-based practice.
Hospitalists may be more likely to work nights and weekends than doctors
in outpatient-based practices, with more weekdays off. They may choose to
join existing companies or begin their own private practices to contract
with parties such as hospitals, managed care organizations and medical
groups. Incomes vary based on geography, but are generally thought to be
similar or slightly higher than for doctors with the same training working
in a traditional (inpatient and outpatient) practice in the same market.
IPC The Hospitalist Company operates a network of small, local practice
groups and is currently seeking to expand its staff in several states. The
company is targeting areas in Georgia, Delaware, Massachusetts, New
Hampshire, Michigan, Illinois and Pennsylvania for growth. Primary
investors in IPC include Scale Venture Partners, Morgenthaler Venture
Partners, Bessemer Venture Partners and CB Health Ventures.
Scale Venture Partners currently holds an almost 18.1% stake in the
company, while each of the others holds less than 15%.
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