Cerritos-based most cancers therapy firm Oncology Institute of Hope & Innovation introduced June 29 that it intends to go public by means of a SPAC affiliated with New York well being care-focused funding firm Deerfield Administration Co.
The deal is valued at $1.06 billion, with a valuation of $842 million assigned to the Oncology Institute.
About $230 million shall be held in a belief account managed by the SPAC, often called DFP Healthcare Acquisitions Corp. And a gaggle of well being care buyers, together with Deerfield and Constancy Administration & Analysis Co., have dedicated to buy $275 million value of shares by means of a non-public placement in a public entity, or PIPE.
The deal is predicted to shut late within the third or fourth quarter with the issuance of about 106 million shares of widespread inventory valued at $10 per share. DFP expects to be renamed the Oncology Institute and shall be listed on the Nasdaq alternate beneath the ticker image TOI.
At that time, the present fairness holders of the Oncology Institute are anticipated to collectively personal 48% of the brand new publicly traded entity. DFP stockholders (together with the PIPE buyers) will maintain about 33%; Deerfield may have about 14%; and a person investor sponsor of the SPAC, Richard Barasch, may have about 5%.
The Oncology Institute was based in 2007 in Cerritos as a for-profit most cancers therapy apply centered on sufferers in close by communities. The concept is to offer a “one-stop store” for most cancers therapy by means of acquisitions and affiliations with present most cancers therapy practices.
The institute makes use of a for-profit, “value-based” enterprise mannequin, decreasing incentives to prescribe high-cost chemotherapy medication by means of using cheaper generics from an on-site dispensary and performing most cancers remedy periods in an outpatient setting wherever doable.
“By specializing in individualized care plans, evidence-based drugs, and nice symptom management, TOI sufferers can obtain higher outcomes with decreased monetary burden,” Chief Govt Brad Hively stated within the announcement.
“Conventional fee-for-service fee fashions emphasize amount over high quality of care, with out contemplating affected person wellness and satisfaction as metrics of success,” Hively added. “We’re dedicated to making use of the ideas of value-based care to concurrently improve high quality and handle prices.”
During the last decade, the institute has grown primarily by means of acquisitions of different most cancers therapy practices right into a multistate operation. Right now, it has greater than 80 oncology-focused medical practitioners, together with physicians and nurses, and roughly 600 workers unfold throughout greater than 50 clinics in California, Nevada, Arizona, and Florida.
The institute recorded income of about $188 million final 12 months, in line with an organization spokesman.
By means of the SPAC transaction, the Oncology Institute is slated to obtain about $225 million to make use of for future development initiatives.
“Our proposed mixture with DFP brings us considerably nearer to increasing our presence throughout the USA and advancing our efforts to rebuild the nation’s well being care system,” Hively stated.
Talking from an investor’s standpoint, Barash characterised the Oncology Institute as disrupting the established order in most cancers care.
“Brad (Hively) and his crew have created a scalable, replicable mannequin with difficult-to-
duplicate capabilities that facilitate speedy enlargement,” Barash stated. “We imagine that their high-touch, data-driven method to most cancers care represents the mannequin of the longer term. This enterprise mixture will create a well-capitalized firm that’s poised to increase organically, by means of accretive M&A exercise, and through strategic payor relationships.”
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