Allscripts, a major EHR vendor, is furthering its relationship with Dr. Patrick Soon-Shiong's NantHealth precision medicine startup, which plans to go public by year-end. The two companies hope to collaborate on a precision medicine platform for cancer care.
Allscripts purchased a 10% equity stake in NantHealth for $200 million in cash. In turn, NantCapital, Soon-Shiong's personal investment vehicle, made a $100 million investment into Allscripts through a private placement of the company's common stock.
The move comes as Soon-Shiong tells Modern Healthcare that NantHealth will part ways with Providence Health and Services, where Soon-Shiong has served as global director of cancer services and bioinformatics. He said the 27-hospital system had a strong delivery system but lacks an organizational understanding of bioinformatics and molecular medicine.
“Initially I thought that Providence would be able to do that, but I've come to realize that, unfortunately, their leadership is not ready to blur science and clinical practice,” Soon-Shiong said. “So we're about to find organizations that will do that.”
Soon-Shiong said organizations that integrate both the “knowledge domain” and the “delivery domain” are rare, but NantHealth is working with with the University of California at Los Angeles and looking at systems like Cedars-Sinai Medical Center, Los Angeles, and City of Hope, Duarte, Calif., in addition to other West Coast institutions.
Soon-Shiong told the Los Angeles Times on Wednesday that he plans to take NantHealth public by year's end.
NantHealth's Genomic Proteomic Sequencing diagnostic test, also known as GPS Cancer, can be used to create personalized cancer treatment plans through its Eviti care planning platform. The company is in the process of bringing the GPS Cancer test to market in a single platform in which providers can coordinate care, access clinical trials, monitor outcomes and control cost.
The equity deal comes after Allscripts and NantHealth announced in March that they would collaborate to develop an integrated, personalized approach to cancer care. The two are building infrastructure for precision medicine programs by combining Allscripts' scale, provider clientele and software products with NantHealth's clinical platform, applications and connectivity devices, NantHealth said.
In order to bring precision medicine to market, the two companies are working to integrate their software and services as well as developing a solution for accountable care organizations that incorporates interoperability.
Though much of Allscripts' business revolves around EHRs and other provider software, the company has made it a strategic priority to invest in technology that it believes will revolutionize healthcare, said Seth Frank, the company's vice president of investor relations.
“I think that if you look at Allscripts' history, we would call ourselves much more than an EHR provider and we've been doing that candidly since early 2013, when the company acquired the dbMotion interoperability platform and FollowMyHealth, a patient engagement platform,” Frank said.
The partnership may be able to benefit from Allscripts clients who are major oncology providers like Cancer Treatment Centers of America, Memorial Sloan Kettering Cancer Center and other major academic medical centers and oncology physicians.
Allscripts expects the deal to be accretive to earnings in 2016 and increasingly accretive over the five-year term of the agreement. The firm did not change its 2015 guidance.
NantHealth recently faced controversy. Two former employees of NantWorks, a NantHealth subsidiary, sued the company in January, alleging that they were fired for objecting to illegal practices that could have hurt patients and devalued the company's stock. NantHealth Chief Operating Officer Steve Curd called the lawsuit “baseless” and said the individuals are trying to extort money from the firm.
Beth Kutscher contributed to this report.
