On late Friday last week, NantHealth, a company combining genomic science and big data to transform healthcare filed for an initial public offering to raise up to $92 million in capital, according to a filing with the Securities and Exchange Commission.
NantHealth’s approach to the science and delivery of precision care is powered by their integrated and adaptive Systems Infrastructure, Knowledge Platform,Provider Platform and Payor Platform known as Comprehensive Learning Integrated NantHealth Intelligent Clinical System, or CLINICS.
CLINICS features:
– Advanced Molecular Diagnosis. Our solutions enable diagnosis, population-level analytics, and risk stratification at the individual molecular signature level, including genomic and proteomic analysis through GPS Cancer.
– Define Right Treatment Before Treatment Begins. Our solutions support decision-making with near real-time bioinformatics and evidence-based protocols using our eviti solution, enabling the clinician to potentially make more optimal treatment decisions.
– Patient Engagement. Our solutions inform the patient, patient advocate and caregivers to improve patient engagement, satisfaction and compliance and encourage active participation in the management of their own health, or self care.
– Real-time Clinical Learning. Our solutions implement advanced analytics and real-time clinical learning while monitoring and measuring outcomes to enrich data sets and implement proactive and preventative clinical intervention engagement.
– Payment for Value. Our solutions facilitate payment for value, better outcomes at lower cost, using our evidence-based approach to the clinical practice of medicine through our inter-domain collaboration portal NaviNet Open.
Here are five things to know about the IPO:
1. NantHealth intends to list its common stock on the NASDAQ Global Market under the ticker symbol “NH.”
2. NantHealth reported a total net revenue of $58.3 million with a net loss was $72.0 million in 2015. Total revenue was $112.9 million and our net loss was $97.7 million.
3. NantHealth estimates that the potential global market for its platform CLINICS, including GPS Cancer, exceeds $50 billion. The revenue generated derives from sales of licensed software and maintenance, software-as-a-service, hardware, services, and GPS Cancer to healthcare providers, payors and self-insured employers.
4. Over the course of three years, NantHealth made several acquisitions and investments in an effort to expanded the features and functionality of CLINICS, including the following:
– NDO. In June 2014, we acquired NDO, which provides healthcare interoperability and informatics solutions through its cOS platform to address population health issues. Our results of operations include the impact of the NDO acquisition as of June 2014.
– NantOmics. In June 2015, we invested a substantial portion of our available capital in NantOmics, a majority owned subsidiary of NantWorks. Our investment represents approximately 14.2% of the issued and outstanding membership interests of NantOmics. Our relationship with NantOmics provides us with access to the nation’s only CAP- and CLIA-certified whole genome and quantitative proteomics laboratory.
– Harris Healthcare Solutions Business. In July 2015, we acquired certain assets related to Harris Healthcare Solutions business, or HCS. Once integrated with our systems, we believe the acquired assets will help complex healthcare delivery organizations achieve better patient outcomes, clinical and administrative workflow efficiency and stronger collaboration across the continuum of care.
– NaviNet. In January 2016, we acquired NaviNet, which provides a secure collaboration network connecting approximately 35 health plans and is utilized in more than 60% of the nation’s physicians’ offices as of the first quarter of 2016. NaviNet Open will serve as a nationwide scalable and secure web-based portal for patients and providers
5. The company has not yet completed the integration of their recent acquisitions, technologies and service offering into its operations which poses a potential risk for shareholders.
6. NantHealth has a history of significant losses and expects this trend to continue risking its ability to achieve or sustain profitability in the future. The company experienced net losses of $84.6 million and $72.0 million during the years ended December 31, 2014 and December 31, 2015, respectively. As of December 31, 2015, the company reported an accumulated deficit of $291.2 million.
The losses and accumulated deficit were primarily due to the substantial investments made to grow the business and enhance systems infrastructure and platforms.
7. CEO and Chairman Dr. Soon-Shiong will not be full-time and will devote on average at least 20 hours per week to our company. He will primarily focus on NantKwest, Inc., or NantKwest, a publicly-traded, clinical-stage immunotherapy company. Soon-Shiong will also devote time to other companies operating under NantWorks, a collection of multiple companies in the healthcare and technology space that Dr. Soon-Shiong founded in 2011.
8. Dr. Soon-Shiong is the principal stockholder of NantHealth and has has significant interests in other companies which may conflict with the company’s interests. The various NantWorks companies are currently exploring opportunities in the immunotherapy, infectious disease and inflammatory disease fields.
As a result, they or other companies affiliated with Dr. Soon-Shiong may compete with NantHealth for business opportunities or, in the future, develop products that are competitive with the company.
In summary, Dr. Soon-Shiong’s interests may not be aligned with the interests of other stockholders, and he may from time to time be incentivized to take certain actions that benefit his other interests and that other stockholders do not view as being in their interest as investors in the company. Even if these actions do not directly relate to NantHealth, actions taken by Dr. Soon-Shiong and the companies and charitable organizations with which he is involved could have a negative impact on our NantHealth.
