Chart of the Week
House Instructions on Reconciliation. Both House Ways & Means and Energy and Commerce cleared their reconciliation packages this week. Not to beat the dead horse but the package provides oodles of money for health care. A few highlights:
Energy & Commerce
- $5.2 billion to Health & Human Services to support advanced research, development, manufacturing, production and purchase of vaccines, therapeutics and ancillary items for treatment and prevention of COVID and any viral variant of SARS-CoV-2.
- $46 billion to Health & Human Services to detect diagnose, trace and monitor COVID-19 infections including implementing a national strategy for testing, contact tracing, surveillance & mitigation of COVID-19; support developing, manufacturing, procuring and distributing PPE and other supplies; investments in laboratory capacity. Part of the $46 billion includes $1.75 billion for genetic sequencing ($ILMN, $PACB)
- Temporarily increases a state’s base FMAP by 5% for two years after an expansion of Medicaid. ($ANTM, $CNC, $MOH)
- Eliminates cap on Medicaid drug rebates beginning Jan. 1, 2023.
Ways & Means
- $200 million for infection control in skilled nursing facilities
- Premium assistance of 85% for COBRA continuation coverage from the first month after enactment through Sept. 30, 2021
- Stabilization of Multi-employer Pension Plans
You can review section by section summaries here for Energy and Commerce and here for Ways & Means. One thing missing is the additional money for providers to the tune of $35 billion. The Senate had amended their resolution to include this amount on a budget neutral basis. The House committees declined to find offsets and so, to this point, it is not included. I would expect the Senate to ultimately intervene at some level.
Rules Action.
All Quiet on the Federal Register front.
Other Stuff.
- The GAO released a report suggesting the VA pause its rollout of the $CERN EHR system. We have maintained this procurement would be nothing but heartache for $CERN and that is proving to be the case.
- FDA’s Vaccine Advisory Committee is scheduled to meet on the 26th. Link to meeting page is here.
SPAC and S-1 Corner.
Filed S-1s This Week
AppHarvest - building some of the world’s largest high-tech greenhouses, combining conventional agricultural techniques with today’s technology to grow fruits and vegetables that are not genetically modified organisms and are free from chemical pesticides. Our vision is to create America’s AgTech capital from within Appalachia and provide better produce, better farming practices and better jobs
ARYA Sciences Acquisition Corp IV – (Goldman) Life Sciences and Medical Technology
Codiak BioSciences Inc. – (Goldman) Clinical-stage biopharmaceutical company focused on pioneering the development of exosome-based therapeutics. Believes exoSTING and exoIL-12 are the first engineered exosomes to enter clinical development.
Glass Houses Acquisition Corp – (Jefferies) Supply chain
Ibere Pharmaceuticals – (RayJ) Targeting a large addressable market as total worldwide prescription drug sales lost due to patent expiration from 2020 through 2026 is expected to be approximately $252 billion,
NeuroOne Medical Technologies - Medical technology company focused on the development and commercialization of thin film electrode technology for continuous electroencephalogram (cEEG) and stereoelectroencephalography (sEEG) recording, spinal cord stimulation, brain stimulation and ablation solutions for patients suffering from epilepsy, Parkinson’s disease, dystonia, essential tremors and other related brain related disorders.
NightDragon Acquisition Corp – (MS) Focused on cybersecurity, safety, security and privacy, or CSSP, sector, which complements the expertise of our management team.
Nocturne Acquisition Corporation – (Chardan) Artificial Intelligence
Oscar Health – (GS) Health Insurance (missed this one last week!)
Protagenic Therapeutics, Inc. - specializing in the discovery and development of therapeutics to treat stress-related neuropsychiatric and mood disorders utilizing synthetic forms of endogenous brain signaling peptides that can dampen overactive stress responses.
Rennova Health, Inc – Operator of rural hospitals and clinics in Tennessee and Kentucky. Given changes in rural health care this might be one to take a look at.
SilverBox Engaged Capital Merger Corp I - (Citi) Health & Wellness
SQZ Biotechnologies Company – (BoA) clinical-stage biotechnology company developing transformative cell therapies for patients with cancer, infectious diseases and other serious conditions. We use our proprietary technology, Cell Squeeze, to physically squeeze cells through a microfluidic chip, temporarily opening the cell membrane and enabling biologic material of interest, or cargo, to diffuse into the cell.
Initial Business Combinations in Process
ARYA Sciences Acquisition Corp III – Nautilus Biotechnology ($900)
Big Rock Partners Acquisition Corp – NeuroRX
Our Take = NeuroRX is developing a drug regime for the treatment of bipolar disorder and Acute Suicidal Ideation/Behavior. Reported this week preliminary results from their Phase 2b/3 trial of ZYESAMI™ (aviptadil, previously RLF-100) performed in collaboration with Relief Therapeutics Holdings, AG (SIX:RLF; OTCQB:RLFTF) in patients with respiratory failure due to Critical COVID-19. The study showed that patients who were treated with the maximal standard of care plus ZYESAMI were discharged sooner from the hospital compared to those treated with placebo plus maximal standard of care (SOC)
Deerfield Healthcare Technology Acquisition – CareMax/IMC Medical
Our Take = Caremax’s TAM is the Medicare Advantage market like $CLOV, $OSH and they appear to be establishing themselves as a risk bearing entity in partnership with health plans and providers. IMC Health is a primary care practice, that paired with CareMax’s risk-bearing solutions might make a good combination. We will reiterate, the MA market is getting highly penetrated, especially in urban areas and the competition for patients will be fierce. Both companies are based in Florida.
Falcon Capital Acquisition – Sharecare ($3.8B)
Our Take = We have been familiar with Sharecare for years and remain a little dubious. Sure, employers are getting more involved in managing their health care spend. Yes, digital therapeutics are a thing. Yet, we remain skeptical. Perhaps a deep dive into the proxy statement will help.
GigCapital2– Uphealth/Cloudbreak Health
Our Take = Uphealth is a digital platform designed to manage chronic and complex care, medications and behavioral health. Cloudbreak provides a telehealth solution that includes quarantined inpatients. One of Cloudbreak’s most interesting features is its multilingual capabilities which should be accretive for providers in communities with non-English speaking patients. Not sure Uphealth offers enough to get behavior to change or encourage adoption.
GX Acquisition Corp – Celularity ($1.7B)
Our Take = We love anything that pushes cell-level therapies and diagnostics forward. The company has several cell therapies in clinical and pre-clinical development that deploy allogeneic placenta derived cells.
Hudson Executive Investment Corp – Talkspace ($1.4B)
Our Take = Behavioral health via telemedicine will prove to be one of those COVID-19 trends that endures. It solves several problems for the incumbent system: availability of providers, cost and productivity. Behavioral/mental health services largely exist outside the health insurance system which eliminates a lot of regulatory risk
JAWS Acquisition Corp – Cano Health
Our Take = Cano represents what we believe will be the most formidable Direct Contracting model in Medicare. Cano is participating in the implementation stage of the first two Direct Contracting Models. The primary care focus gives maximum insight into patient condition, needs and behaviors that can be influenced to avoid high cost care. One caveat since we still bear the scars of PhyCor: physicians drive patient flow and if you don’t keep them happy, they go elsewhere.
Leisure Acquisition Corp – Ensysce Biosciences ($207M)
Longview Acquisition Corp – Butterfly Network
Our Take = Butterfly makes portable ultrasound devices for the human and animal health markets. Portable means greater efficiency which is going to continue to be important as the health care delivery system works through the backlog of cases created by COVID. The Teleguidance system could prove to be valuable in areas with limited access to advanced technology.
VG Acquisition Corp. – 23andMe
Our Take = 23andMe plans on a future in drug development using their extensive library of genetic data. It seems like a reasonable plan but privacy concerns are likely to be a feature of this company’s regulatory environment for some time to come.
If you are investing in SPACs but not super familiar with health care, hit and we can help.
Replays
Tom Tobin joined me in the "studio" to discuss the myriad of problems $CLOV faces to be the "growth" company it purports to be. A small New Jersey insurance company has an uphill climb when underwriting losses are substantial, cost controls are limited and customer service poor. No evidence their nifty website can change those things. Watch the replay here.
Upcoming Events.
Feb. 24 @10 a.m. ET (Add to Outlook Calendar) – Is the Sun Setting on Managed Care? We are going to take a look at enrollment trends, penetration into eligible populations, star ratings and what deferred care means to MLR.
Tweet of the Week
Have a great weekend!
Emily Evans
Managing Director – Health Policy
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