WAYNE, Pa., Oct. 23, 2015 /PRNewswire/ -- Safeguard Scientifics, Inc. (NYSE: SFE) today announced third quarter 2015 financial results. Safeguard's partner companies achieved significant developmental milestones and recorded continued aggregate revenue growth. For the three months ended September 30, 2015, Safeguard partner company aggregate revenue was $114.6 million, up 33% from $86.3 million for the same quarter of 2014. For the nine months ended September 30, 2015, partner company aggregate revenue was $333.1 million, up 29% from $258.2 million for the same period in 2014.
"While public markets suffered substantial volatility during the third quarter, Safeguard's partner companies continued to grow revenue on an aggregate basis and achieved significant developmental milestones," said Safeguard President and CEO Stephen T. Zarrilli. "Safeguard remains on track to realize continued growth in partner company aggregate revenue; to increase the total number of our partner companies to approximately 30; to deploy $35 million to $50 million in new partner companies and $30 million to $50 million in follow-on funding for current partner companies; and to execute a minimum of two profitable exits with a minimum aggregate cash value of $50 million. We are confident that our near-term successes will sustain our long-term commitment to drive significant increases in Safeguard's assets under management."
For the three months ended September 30, 2015, Safeguard's net loss was $11.6 million, or $0.56 per share, compared with net loss of $14.0 million, or $0.68 per share, for the same quarter of 2014. For the nine months ended September 30, 2015, Safeguard's net loss was $45.3 million, or $2.17 per share, compared with net income of $10.0 million, or $0.47 per share, in the same period last year.
At September 30, 2015, Safeguard's roster of 27 partner companies was comprised of 11 healthcare and 16 technology companies. "The cost of our interests in these companies totaled $278.9 million," said Jeffrey B. McGroarty, Safeguard Senior Vice President and CFO. "Our net cash, cash equivalents and marketable securities at quarter-end totaled $52.8 million, after subtracting the total carrying value of debt outstanding of $51.4 million. During the third quarter of 2015, we deployed $11.5 million in follow-on funding to two existing partner companies. We also received initial proceeds of $7.8 million from the previously announced sale of Quantia, and we realized an aggregate of $5.9 million in proceeds from milestone payments and escrow from prior years' exits."
During the third quarter, Safeguard repurchased $1.7 million of its common stock in open market transactionsrepresenting 99,100 shares with an average price of $17.61 per shareunder an ongoing $25 million share repurchase authorization. Additional repurchases may be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission requirements and based on market conditions. At September 30, 2015, Safeguard shares outstanding totaled 20.7 million.
Significant accomplishments by Safeguard's partner companies during the third quarter include:
- Product Launches/Regulatory Approvals Aventura, Good Start Genetics, Propeller Health, Putney, QuanticMind and Trice Medical
- Major Customer Wins AppFirst, Transactis and WebLinc
- Strategic Partnerships Beyond, Clutch Holdings, MediaMath, Syapse, Trice Medical and WebLinc
- Industry Awards/Media Recognition Apprenda, InfoBionic, Hoopla Software, MediaMath, meQuilibrium, NovaSom, Pneuron and Spongecell
- Follow-on Financing/Other Transactions Apprenda, InfoBionic and Medivo
AGGREGATE PARTNER COMPANY REVENUE
For 2015, partner company aggregate revenue is projected to be between $430 million and $450 million, which includes revenue for all partner companies in which Safeguard had an interest at January 1, 2015, but excludes DriveFactor, which was sold in April 2015, and Quantia, which was sold in July 2015. Aggregate revenue for the same partner companies was $359 million for 2014 and $290 million for 2013. Aggregate revenue for all years reflects revenue on a net basis. Revenue data for certain partner companies pertains to periods prior to Safeguard's involvement with those companies and are based solely on information provided to Safeguard by those companies.
PARTNER COMPANY HIGHLIGHTS
The following partner company highlights represent information as of September 30, 2015.
Partner Company Revenue Stages | |||
Development Stage
| Initial Revenue Stage
| Expansion Stage
| High Traction Stage
|
HEALTHCARE
AdvantEdge Healthcare Solutions, Inc.(Warren, NJ High Traction Stage)
AdvantEdge Healthcare Solutions ("AdvantEdge") is a technology-enabled provider of healthcare revenue cycle and business management solutions that substantially improve decision-making, maximize financial performance, streamline operations and mitigate compliance risks for healthcare providers. AdvantEdge is recognized as one of the top-10 medical billing, coding and practice management companies in the U.S.; has nearly 600 employees in seven regional offices in the U.S. and one office in Bangalore, India; and collects approximately $1 billion annually for its physician, hospital, ambulatory surgery, behavioral health and large office-based clients. Safeguard has deployed $16.3 million in AdvantEdge since November 2006 and has a 40% primary ownership position.
Market Opportunity The market for AdvantEdge's services is estimated to be more than $10 billion annually, which includes hospital-based physician revenue cycle management and office-based revenue cycle management. The ongoing pressures created by provider consolidations, reimbursement pressures and accountable care initiatives present challenges for players in the revenue-cycle management space particularly for the smaller companies in the industry that do not have the scale, technological capabilities or economic resources to meet the evolving needs of the market. AdvantEdge intends to capitalize on these industry dynamics to grow its franchise over the long-term.
Operating Highlights AdvantEdge continues to pursue scale through organic growth and strategic acquisitions, completing eight M&A transactions since 2009. The company's revenue in 2014 exceeded $40 million. In 2015, AdvantEdge is focused on accelerating organic growth.
Aventura, Inc.(Denver,CO Initial Revenue Stage)
Aventura is a leading provider of awareness computing for the healthcare industry. Through its patented technology, Aventura delivers awareness of a user's identity and role, the location within a facility, the device being used, and the patient being treating. Based on this awareness, Aventura immediately delivers a virtual desktop and dynamically provisions the applications and exact screens a user needs to care for that particular patient, eliminating wasteful clicks and keystrokes. As a result, Aventura helps customers achieve their important initiatives in the areas of electronic medical record ("EMR") adoption and meaningful use requirements, protected health insurance security, mobility and cost containment. Safeguard deployed $6.0 million in Aventura in January 2015 and has a 20% primary ownership position.
Market Opportunity Hospitals have invested heavily in EMR, driven largely by $36 billion in federal incentives. Despite significant investments in health information systems, efficiency, data security and workflow optimization, challenges around day-to-day access to patient data persist. Searching in multiple applications to compile a complete view of patient charts requires further investment to leverage the EMR spend. U.S.-based hospitals are estimated to spend $1.3 billion to optimize workflow for patient data access, and fewer than half of U.S. hospitals have implemented an optimization solution.
Operating Highlights During the third quarter of 2015, Aventura launched a workflow optimization solution that addresses common technical obstacles with speech recognition applications. Aventura for Speech Recognition uses situational awareness to provide a customized clinical computing experience that combines fast access to support mobile clinicians. The application intrinsically recognizes each clinician by role, location, device, and patient in the room, eliminating the need for manual login and reducing login time from minutes to seconds. During the quarter, Aventura also appointed healthcare technology veteran, John Glaser, Ph.D. to its board of directors. Glaser is a senior vice president at Cerner Corporation (NASDAQ: CERN), and is responsible for driving its technology and product strategies, interoperability and government policy development. Previously, Glaser was CEO of Siemens Health Services, a company acquired by Cerner in February 2015.
Good Start Genetics, Inc.(Cambridge, MA High Traction Stage)
Good Start Genetics is a commercial-stage molecular genetic information company focused on fundamentally transforming the standard of care in reproductive medicine by providing physicians and their patients with clinically relevant and actionable information concerning inherited genetic disorders. Through GeneVu, the company provides a comprehensive and clinically actionable menu of genetic carrier screening tests for known and novel mutations that cause inherited genetic disorders. Through its exclusive relationships with IviGen and iGenomix in the U.S. and Canada, Good Start Genetics offers clinicians additional important tests designed to improve pregnancy success rates and the chances of having a healthy baby. Additionally, through two exclusive agreements with Johns Hopkins University, Good Start Genetics has obtained rights to Fast-SeqS technology, which may streamline the delivery and costs of providing pre-implantation genetic screening and non-invasive prenatal testing. Safeguard has deployed $12.0 million in Good Start Genetics since September 2010 and has a 30% primary ownership position.
Market Opportunity According to the Centers for Disease Control and Prevention, approximately 62 million women are within reproductive age range in the U.S.; and 6.6 million pregnancies occur annually in the U.S. This presents a total addressable U.S. market opportunity of $1.25 billion to $1.5 billion for carrier screening in reproductive health.
Operating Highlights During the third quarter of 2015, Good Start Genetics added EmbryVu, a new preimplantation genetic screening ("PGS") test. PGS improves the chances of successful in vitro fertilization by identifying embryos that have an increased chance of implantation and successful pregnancy. Good Start Genetics is offering EmbryVu at considerably lower prices than has historically been offered by other lab offering PGS tests. The company continues to expand access to its GeneVu genetic carrier screening tests to the broader women's health community, including obstetrics, gynecology and maternal fetal medicine physicians.
InfoBionic, Inc. (Lowell, MA Development Stage)
InfoBionic is an emerging digital health company focused on creating superior patient monitoring solutions for chronic disease management with an initial market focus on cardiac arrhythmias. InfoBionic's MoMe® Kardia system will empower physicians with control to transform the efficiency with which they manage cardiac arrhythmia detection and monitoring processes for their patients. Leveraging a comprehensive, cloud-based remote patient monitoring platformthe first and only of its kindInfoBionic will deliver on-demand, actionable monitoring data and analytics directly to the physicians themselves. The MoMe Kardia 3-in-1 device streams continuous electrocardiogram, respiration and motion data to the cloud for analysis and delivers automated reporting to any mobile device, tablet or web-based portal where physicians will be able to access and interact with the data they need, in the detail they wantanytime, anywhere. Safeguard has deployed $9.5 million in InfoBionic since March 2014 and has a 39% primary ownership position.
Market Opportunity The global addressable market for monitoring cardiac arrhythmia and related events is estimated to be approximately $3 billion worldwide, including $1 billion in the U.S.
Operating Highlights During the third quarter of 2015, Safeguard provided an initial $1.5 million of a $3.5 million commitment in connection with an $8 million Series B-1 financing to support development and commercialization of InfoBionic's second-generation cardiac arrhythmia detection platform, MoMe® Kardia. Pending clearance by the U.S. Food and Drug Administration ("FDA"), InfoBionic expects to launch its platform in 2016. During the quarter, InfoBionic also appointed Hamid Tabatabaie, a 30-year health information technology veteran and chief executive of four successful startups, to the company's board of directors. Tabatabaie is founder and CEO of lifeIMAGE, a cloud-based service for exchange of diagnostic imaging information. In addition, InfoBionic was included in a list of 75 women-led startups in the Boston area compiled by BostInno, an American City Business Journals property.
Medivo, Inc.(New York, NY Expansion Stage)
Medivo is a healthcare data analytics company that unlocks the power of lab data to improve health. Medivo is the largest source of lab data in the U.S. with access to over 150 million patients through its nationwide network of partner labs. Medivo analyzes large data sets and shares its findings with the medical community at large, as well as with its life science, payer and lab partners, to ensure that appropriate available treatments are provided to patients sooner. Safeguard has deployed $11.6 million in Medivo since November 2011 and has a 35% primary ownership position.
Market Opportunity Medivo generates revenue through targeting and analytics programs and clinical services. Based on current monetization strategies, the addressable healthcare analytics market for Medivo's products is estimated to reach $10.8 billion.
Operating Highlights During the third quarter of 2015, Medivo sold its lab testing authorization services division to PWNHealth to sharpen Medivo's strategic focus on high-value recurring revenue from aggregating, analyzing and commercializing healthcare data. Medivo has partnered with seven of the top ten life sciences companies, and is working to grow its roster of pharmaceutical clients.
meQuilibrium, Inc. (Boston, MA Initial Revenue)
meQuilibrium is a digital coaching platform that delivers clinically-validated and highly-personalized resilience solutions to employers, health plans, wellness providers, and consumers increasing engagement, productivity and performance, as well as improving outcomes in managing stress, health and well-being. The clinically validated, HIPAA-compliant, software-as-a-service ("SaaS") platform delivers an individualized digital coaching experience. The scientifically validated and clinically proven approach is based on 15 years of research showing the link between stress and resilience, and grew out of research on resilience at the University of Pennsylvania. Designed for mobile and desktop use, the scalable meQuilibrium platform guides users through a personalized assessment to develop a long-term roadmap focused on critical skills to boost resilience. Data from the aggregated meQuilibrium user base provide metrics and insights on workforce well being informing human capital strategies and decision-making. Safeguard deployed $6.5 million in meQuilibrium in April 2015 and has a 32% primary ownership position.
Market Opportunity In the latest Staying@Work Survey from Towers Watson, employers from around the world emphasize that stress is the #1 lifestyle risk factor, propelling absenteeism, productivity, injury and turnover costs. These factors cost U.S. businesses an estimated $300 billion annually, and healthcare expenditures are estimated to be 50% greater for high-stress workers.
Operating Highlights During the third quarter of 2015, meQuilibrium continued to gain traction with enterprise sales, taking advantage of benefits open-enrollment season. Enterprise clients currently include Citrix, Comcast, Hewlett-Packard, Iron Mountain, Nemours, and Target. Recruiting initiatives are advancing for sales executives to lead business development in the health plan sector and with benefit-consultant and wellness-portal channel partners. meQuilibrium was included in BostInno's list of 75 women-led startups in the Boston area, and was named a finalist on BostInno's 50 on Fire which features Boston's biggest game changers. Co-founder and CEO, Jan Bruce, published "meQuilibrium: 14 Days to Cooler, Calmer and Happier" which outlines how to focus on rewarding activities instead of worry, anxiety, anger and guilt. Co-authors are co-founder Andrew Shatte, Ph.D. and Adam Perlman, M.D. In addition, meQuilibrium hosted a panel at the National Business Group on Health 29th Conference on Employee Health, Productivity and Human Capital. Jan Bruce spoke alongside Dr. Tanya Benenson, Chief Medical Officer of Comcast NBCUniversal who presented the positive impact the meQuilibrium program has had on absenteeism in their call centers.
NovaSom, Inc.(Glen Burnie, MD Expansion Stage)
NovaSom is a leader in Obstructive Sleep Apnea ("OSA") home testing with the AccuSom® home sleep test, the only comprehensively supported home sleep test that provides continuous patient support and next-day test results and interpretation for health care professionals. The FDA-cleared AccuSom is as accurate as sleep-lab testing and significantly more convenient and comfortable for patients. Patients are able to test around their own schedules and can sleep in their own beds, which helps eliminate "first-night" effect and improves data collection. Safeguard has deployed $21.1 million in NovaSom since June 2011 and has a 32% primary ownership position.
Market Opportunity The OSA diagnostic market in the U.S. is estimated to be approximately $4 billion and is growing more than 15% annually. Only 3 million sufferers in the U.S. have been diagnosed to date, out of an estimated 40 million moderate to severe OSA sufferers.
Operating Highlights During the third quarter of 2015, chief medical officer Michael Coppola, M.D. was elected as a fellow of the American College of Physicians for his extensive achievement in sleep and pulmonary medicine, public health policy, patient advocacy and scholarly activities over the past 25 years. NovaSom's AccuSom home sleep test is being featured in an episode of Innovations with Ed Begley Jr. on the Discovery Channel. AccuSom is currently covered for more than 150 million commercially insured U.S. lives. NovaSom is accredited by the Joint Commission as an Ambulatory Care Sleep Diagnostic Center & Telehealth Provider and is classified by the Centers for Medicare & Medicaid Services as an Independent Diagnostic Testing Facility.
Propeller Health, Inc.(Madison, WI Initial Revenue Stage)
Propeller Health provides digital solutions to measurably improve respiratory health. One of the first mobile platforms with FDA clearance, Propeller Health combines sensors, mobile apps and predictive analytics to monitor and engage patients, increase adherence and encourage effective self-management. Propeller Health partners with integrated delivery systems and health plans seeking new solutions to improve quality, strengthen care teams and reduce the cost of care for asthma and chronic obstructive pulmonary disease ("COPD"), the fifth and sixth most expensive diseases in the U.S., respectively. Safeguard deployed $9.0 million in Propeller Health in August 2014 and has a 25% primary ownership position.
Market Opportunity Asthma and COPD currently cost payers and patients in the U.S. more than $100 billion annually. By 2020, the CDC estimates that the cost of medical care for adults in the U.S. with COPD alone will increase 53% to more than $90 billion.
Operating Highlights During the third quarter of 2015, Propeller Health received FDA clearance to market its system for use with asthma and COPD medications administered through GlaxoSmithKline's Diskus dry powder inhaler. FDA-approved marketing claims of "improved adherence" and "reduction in exacerbations" address key unmet needs in respiratory health. Propeller Health's software-as-a-service, recurring revenue business model continues to draw interest from large pharmaceutical companies, device manufacturers and health insurance providers. M&A and financing activities are increasing in digital health, according to a recent Accenture report. Digital health deals totaled 396 in 2014, up from 118 in 2010. Digital health funding in 2014 was $3.5 billion, compared to less than $1 billion in 2010. In 2015, in the "smart inhaler" space, Teva Pharmaceuticals acquired Gecko Health Innovations of Cambridge, MA and Australia-based Adherium completed an initial public offering. Unlike competing medical product offerings, Propeller Health's offering in the medical management services category generates recurring revenue based on improved treatment outcomes, patient retention and other analytics versus medical products for competitors.
To read full press release, please click here.
Help employers find you! Check out all the jobs and post your resume.
