🩺 CVS dropped $10.6 BILLION for this company

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Here’s your itinerary:

• 🤑 CVS dropped $10.6 BILLION for this company

• 🫀 This itty bitty heart pump raised $55 Million

• 🧠 On this Day

• 📚 Interesting Reads

🤑 CVS dropped $10.6 BILLION for this company

The big get bigger: CVS has finalized its acquisition of Oak Street Health, a Chicago-based medical group that employs approximately 600 primary care providers across 169 medical centers in 21 states. Here’s why.

CVS plans to build a healthcare business that includes doctor's offices, a health plan, and a pharmacy. Basically, CVS is building its own healthcare ecosystem.

Oak Street specializes in contracting with Medicare payers to manage care for their patients, which ties into CVS's key growth area, Medicare Advantage.

Massive Upside

CVS believes that each Oak Street center could potentially contribute $7 million in adjusted earnings at maturity, representing more than $2 billion in adjusted earnings by 2026. Not a bad outlook if you ask me.

It’s important to note that Oak Street is losing money each year and is expected to lose over $200 million in 2023, only reaching profitability in 2025 - at the earliest.

The deal faced minimal regulatory scrutiny despite opposition from antitrust advocacy groups and political figures such as Senator Elizabeth Warren.

CVS has been on a roll this year. In March, they completed the $8 billion purchase of home care provider Signify Health. They’re (probably) prepping for the aging boomer generation.

Big picture: CVS is making a play to be the face of healthcare in America. They’ve spent over $18.6 billion in the last 4 months to build a nationwide provider network. If all goes well (for them), CVS could operate as a closed loop healthcare system within the next 5 years.

🫀 This Itty Bitty Heart Pump Raised $55 Million

The device could transform the treatment of heart failure, which is a leading cause of hospitalization and death.

Magenta Medical has developed the worlds smallest proprietary heart pump which is designed to support patients with heart failure. The device is implanted through a minimally invasive procedure that does not require open-heart surgery. It’s less invasive and risky than traditional pumps and can be implanted in under an hour.

The miniaturized device pumps blood for the patient throughout the course of their recovery, several hours or days, which allows their heart to rest. The device’s potential advantages were recognized by the US Food and Drug Administration (FDA), which granted it Breakthrough Device Designation for two indications: high-risk percutaneous coronary intervention and cardiogenic shock.

Spending $55 Million

Magenta Medical plans to use the $55 million to support further development of the heart pump technology and pursue regulatory approvals in key markets, including the United States and Europe.

Once the technology is FDA approved, physicians will be able to use a single device to treat the full range of mechanical circulatory support patients, eliminating invasive replacement procedures.

Magenta Medical was founded by serial entrepreneurs Professor Ehud Schwammenthal and Yosi Tuval, who previously founded medical device company Ventor Technologies, which was later acquired by Medtronic.

🧠 On this Day (May 3rd)

• In 1765, the first North American medical college opened in Philadelphia

• In 1802, Washington D.C. was incorporated as a city

• In 1863, Battle of Salem Church, Virginia

• In 1937, Margaret Mitchell won the Pulitzer Prize for “Gone With The Wild”

Source

📚 Interesting Reads

• IBM made a quantum computer for studying healthcare

• Explaining the health risks of gas stoves

🚿 Shower Thoughts

• Trees are so effective at creating shade because any sunlight that gets through is energy they're missing out on. Source

• Science fiction enabled future generations to be nostalgic about things that didn't end up happening. Source

• No one will ever know the exact number of people on earth. Source

• Impressing a baby feels a lot better than impressing your peers. Source

😆 Funnybone

That’s a wrap for today! If you enjoyed this edition of Scrubs, make sure you forward it to a friend. That would make my day because it helps Scrubs grow.

See you tomorrow,

Miles Beaudoin

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