Chart of the Week
Rules Action.
Quiet as a tomb on the rules front as the Biden administration gets off to a slow-ish start. However, sitting over at OMB are preliminary rules for Inpatient Hospitals, Long Term Care, Inpatient Psychiatric Facilities and Skilled Nursing Facilities. All of these would have been written during Trump administration so don’t expect too many surprises to the downside. The big question is whether the Office of the Actuary will properly account for inflation, particularly as it applies to wages. If they do not, Medicare rates could be insufficient for the Medicare-centric providers like home health, SNFs and, to a lesser degree, IRFs.
Other Stuff.
- $JNJ meets with the FDA’s VRBPAC today. Their vaccine would require only a single shot which adds speed and scope to the vaccination roll-out.
- Senate Committees health confirmation hearings for HHS Secretary nominee, Xavier Becerra. An important exchange related to the persistence of the Public Health Emergency to which certain Medicare and Medicaid waivers are tied as well as the 6.2% increase in Medicaid FMAP. Sen. Mitt Romney brought up the solvency of the Medicare Trust Fund which apparently the administration is working on.
- The president’s nominee for Director of OMB, the heartbeat of the regulatory system, hit a snag. Neera Tanden, whose proclivity to poorly considered tweets about the Senators now charged with confirming her, has met with some opposition.
- The CDC’s Advisory Committee on Immunization Practices meets on Feb 28-March 1 from 10am to 5pm ET.
- President Biden signed an Executive Order on Wednesday calling for a 100-day review of the pharmaceutical supply chains. As has been the case for year, the federal government is concerned about an over-reliance on China and India for API and other supplies.
SPAC and S-1 Corner.
Filed S-1s This Week
Khosla Ventures Acquisition Co. IV – (GS - $200M - $KVSD) – Technology enabled health, AI, agriculture/food
ElectroMedical Technologies – Electromedical technology for pain management
GX Acquisition Corp. II – (Cantor - $300M) – General, including health care
Graf Acquisition III – (Oppenheimer - $300M) – General, including health care
Graf Acquisition IV (Oppenheimer - $150MM) – General, including health care
Galliot Acquisition Corp. (MS - $250M) – General, including health care
Healthwell Acquisition Corp. I (Jefferies - $250M) Technology-enabled health care
Bilander Acquisition Corp. (MS - $150M) Technology, including health care
Innovage Holding Company (JPM) Care coordination in Medicaid and Medicare
S-I Notice of Effectiveness
CM Life Sciences II Inc. (Jefferies - $200M - $CMIIU) – Research tools, diagnostics, therapeutics, data and industrial outputs (2/22/2021)
Gores Holdings VII, Inc. (DB - $400M) General health care (2/22/2021)
Hudson Executive Investment Corp. III (Citi - $500M - $HIIIU) (2/23/2021) – Technology enabled health care
Cartesian Growth Corporation (Cantor - $250M) (2/23/2021) General, with health care background
Initial Business Combinations in Process
ARYA Sciences Acquisition Corp III – $ARYA - Nautilus Biotechnology ($900)
Alpha Healthcare Acquisition Corp - $AHAC – Humacyte
Big Rock Partners Acquisition Corp – $BRPA 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 – $DFHT -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 – $FCAC 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. Yesterday, Sharecare completed its umpteenth acquisition, doc.ai, an enterprise artificial intelligence platform.
Fortress Value Acquisition Corp. – $FAII ATI Physical Therapy ($2.5B) Link to press release.
Our Take = The company operates 900 physical therapy clinics in 25 states focused on MSK treatment. Their client base includes employers, sports teams and individuals. Policy is pushing MSK procedures out of the hospital setting and away from captive sports medicine departments.
GigCapital2– $GIX 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 – $GXGXU 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 – $HECCU 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 – $JWS 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 – $LACQU Ensysce Biosciences ($207M)
Longview Acquisition Corp – $BLFY 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. – $VGAC 23andMe
Out 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
Managing Managed Care Post-COVID: It Won’t Be Easy. Health Policy Subscribers CLICK HERE for event replays (includes video/audio replays and materials link)
Upcoming Events.
SPAC-madness: The Good, the Bad & The Ugly in Health Care with Matthew Holt of SMAC(K) Health. March 10 @2pm ET
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Emily Evans
Managing Director – Health Policy
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