The new administration in the White House has caused concerns for some players in the healthcare space, with providers and health plans delaying expenditures based on uncertainty.
However, founders of digital health companies remain cautiously optimistic and feel well positioned to navigate any regulatory changes, according to the Rock Health report for the first quarter of the year.
During the period, Rock has counted 71 digital health deals of $2 million or more, totaling over $1 billion. Of those deals, five were over $50 million, including PatientsLikeMe, Livongo Health, Alignment Healthcare, Nuna Health and Evariant.
Category-wise, analytics and big data accounted for the most dollars and most deals (11). Telehealth was also strong with 6 deals and $50.7 million raised.
Rock Health has also tracked 20 M&A transactions in Q1, including the two most notable acquisitions:
- McKesson – CoverMyMeds for $1.1B in cash, plus an additional $275M contingent upon CoverMyMeds’ meeting financial performance goals ending fiscal year 2019; and
- Castlight Health – Jiff for all-stock consideration of up to $135M.
Looking at the public markets, Rock has noted that The Digital Health Public Index (unweighted) is up 13% since the beginning of the year, propelled in part by Teladoc, which is now trading at an all-time high. In contrast, Fitbit currently trades 25% below its 2017 opening price and 70% below its 2015 IPO price, even though it is expected to sell $1.5B in devices in 2017.
Finally, Rock talks about new digital health-friendly funds that were announced in Q1, including those raised by Oak HC/FT, Venrock, Lux Capital, and new funds – Biomatics Capital, Section 32, Spectrum Health, and Refactor Capital.