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Spring Health to Buy Alma in Merger of Mental-Health Startups
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By Brian Gormley, WSJ Pro
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Good day. Spring Health has agreed to acquire Alma in a merger of well-funded mental-healthcare startups, adding to a wave of consolidation in the digital-health market.
Spring, backed with $415 million in venture capital, has agreed to buy Alma, which has raised $221 million in venture funding, for an undisclosed amount of stock and cash. The companies expect the merger to close in the second quarter, subject to customary closing conditions and antitrust review.
The combined business—to be called Spring Health—expects to have about $1 billion in revenue in the year following the merger, and based on that revenue and growth rate, to be valued at $6 billion to $7 billion, people familiar with the matter said.
Mergers and acquisitions of digital-health startups jumped last year, with 195 deals, a 61% increase from 2024, according to Rock Health, an investor in the industry, which includes sectors such as healthcare artificial intelligence and telehealth.
A tepid market for healthcare initial public offerings and a harsh venture funding climate are contributing to the M&A surge. But startups are also seeking to capitalize on rising demand for AI products across healthcare, said Katie Rubino, a partner with law firm Wiggin and Dana whose practice includes advising healthcare-technology companies.
Read the full article HERE
And now on to the news...
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Eli Lilly and Novo Nordisk dominate the obesity-drug market, but Roche, Pfizer and Amgen are trying to come up with new treatments to challenge them. PHOTO: ANDREW SILVER/REUTERS
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Roche touts obesity shot trial. Roche Holding said an experimental injection achieved positive results in a midstage clinical trial by helping patients shed weight, paving the way for the start of the company’s first late-stage obesity study. Eli Lilly and Novo Nordisk’s GLP-1 drugs currently dominate the obesity-drug market, but big drugmakers including Roche, Pfizer and Amgen, as well as smaller players, are trying to come up with new treatments to challenge them.
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Roche is looking to establish an obesity franchise with several drug candidates under development that it aims to launch as standalone treatments or combined among them.
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It acquired experimental weight-loss medicines in injection and pill forms through its purchase of Carmot Therapeutics, and struck a licensing deal with Denmark’s Zealand Pharma to co-develop another therapy.
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Ares Leads $1.6 Billion Debt Financing for Personal-Care Product Merger
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Ares Management led a $1.6 billion debt financing package to support the merger of personal-care brands Suave Brands and Elida Beauty, both backed by consumer-focused firm Yellow Wood Partners.
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Yellow Wood is merging the companies to form a new entity called Evermark.
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Karen De Castro, a partner at Ares Credit Group, said the firm’s bet on the personal-care sector stems in part from what it considers to be recession-resilient demand for everyday use products.
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Tesla to Invest $2 Billion in Elon Musk’s xAI
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Tesla reported a 61% drop in profit for the fourth quarter after losing its edge as the world’s leading electric-vehicle maker and said it would invest $2 billion in Elon Musk’s private artificial-intelligence firm, after shareholders’ views were mixed on the move. The company said it entered into an agreement on Jan. 16 to invest in xAI’s Series E funding round. Tesla shareholders had previously voted down a proposal that asked the board to invest in the startup, with more “no” votes and abstentions than “yes” votes.
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Correction: Voyager Ventures calls itself a climate tech investor. Wednesday’s newsletter incorrectly said that the firm had dropped the “climate tech” label, based on inaccurate information from Voyager.
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Funds
Obvious Ventures, an early-stage investor focusing on planetary, human and economic health, closed its fifth core fund with over $360 million in commitments.
Epidarex Capital held the first close of its Epidarex Capital IV fund with more than $145 million in commitments to invest in therapeutics and medical device companies across the U.S. and U.K.
People
Maverick Ventures promoted Lexi Henkel to managing director. She has helped lead several deals while at the firm including Oula Health, Nourish, Prosper Health and Claim Health. Prior to joining Maverick Ventures, she led finance and strategy TMRW Life Sciences.
Bicycle Health, a platform for the virtual delivery of opioid use disorder care, appointed Rick Dean as chief executive officer. He was previously CEO of OncoHealth.
Sevaro Health, a physician-led neurological and specialty care access provider, appointed Carl Dugart as chief technology officer, and Vineet Agrawal as head of growth. Dugart was most recently at Medically Home. Agrawal was previously at Penumbra.
IgniteData, an intelligent clinical trial data automation provider, appointed Laura Hilty as chief strategy officer and Joe Lengfellner as chief product officer. Hilty also serves as a principal at HealthX Ventures. Lengfellner joins the company from Memorial Sloan Kettering Cancer Center.
Intelligent cell manufacturing startup iOrganBio appointed Karol Jarzabek as chief operating officer. He most recently served as vice president of portfolio operations at QHP Capital.
Opentrons Labworks, a laboratory robotics company building physical infrastructure for AI-driven drug discovery, promoted James Atwood to chief executive officer.
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Cellares, a South San Francisco, Calif.-based startup focused on the automated, large-scale manufacture of cell therapies, scored $257 million in Series D financing. Investment funds managed by BlackRock and Eclipse co-led the round, which included participation from Intuitive Ventures, EDBI, DC Global Ventures and DFJ Growth.
TRex Bio, a South San Francisco, Calif.-headquartered startup creating biologics aimed at restoring immune balance in autoimmune and inflammatory diseases, landed a new $50 million investment from Janus Henderson Investors, Alexandria Venture Investments, Avego BioScience Capital, Pfizer Ventures, Polaris Partners and others.
Antheia, a Menlo Park, Calif.-based biosynthesis platform focused on accelerating commercialization of critical pharmaceutical ingredients, added $24 million in Series C funding led by Athos and America's Frontier Fund, bringing the round total to $80 million.
Primmune Therapeutics, a San Diego-based biotech startup, added $8.6 million in Series B funding, bringing the round total to $23.3 million. Investors including Bioqube Ventures, Oberland Capital and Samsara Biocapital contributed to the latest tranche, which will help Primmune fund a study in patients with Stage III resectable melanoma.
Snout, a pet healthcare financing platform, snagged $10 million in Series A funding led by Footwork, alongside $100 million in debt financing.
Revena, a São Paulo-based startup focused on automating the hospital revenue cycle, nabbed $8 million in seed funding from investors including Canary, Flourish Ventures and Caravela Capital.
Barnwell Bio, a New York-headquartered precision animal health intelligence provider, was seeded with a $6 million investment. Twelve Below led the round, which included contributions from Max Ventures, Dorm Room Fund, Alumni Ventures and others.
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