Danaher drops $10B on Masimo acquisition

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Danaher Drops $10B on Masimo Acquisition

The deal
Global life sciences giant Danaher coughed up a pretty penny to buy Masimo, spending roughly $10 billion to beef up its diagnostics portfolio. The deal, announced Tuesday, values medical device developer Masimo at $180 per share.

Masimo's tech
Irvine, California-based Masimo sells noninvasive patient monitoring technologies, best known for its pulse oximetry devices and sensors. They work by emitting light through the skin to measure oxygen levels in a patient's blood in real time.

Danaher's hospital business is also largely concentrated in its diagnostics segment, providing equipment and software for use across labs, point-of-care testing and pathology services.

Part of the larger diagnostics unit
Under the deal, Masimo will become a standalone brand within Danaher's greater diagnostics business, operating independently while strengthening the parent company's offerings for acute care settings. Some other brands existing within Danaher's diagnostics unit include Beckman Coulter Diagnostics, Cepheid, Leica Biosystems and Radiometer.

An analyst's take
Michael Abrams, managing partner of Numerof & Associates, views the deal as both defensive and offensive for Danaher. Defensively, it diversifies the company beyond its traditional drug development tools into the more stable, steadily growing acute care market. On the offensive side, the deal gives Danaher access to Masimo's profitable devices and sensors, which will allow the company to play a more of a role in ongoing patient care and expand its presence in hospital technology.

Overall, Abrams sees the deal as part of a broader industry trend toward consolidation, with large companies pursuing scale and diversifying their product offerings.

"Larger strategics, like Danaher, are doubling down on vertical integration across the care continuum: diagnostics to monitoring to analytics," he stated.

— By Katie Adams

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What Frist Cressey Will Target With Its $425M Healthcare Fund

The skinny
Frist Cressey Ventures closed a $425 million fund, which it will use to invest in early-stage healthcare companies focused on bringing down costs and leveraging AI, the firm announced on Thursday.

What are the fund's focus areas?
Similar to previous funds, this fund will focus on financing companies that advance care delivery for patients and improve access and affordability, according to Partner Olivia Capra. However, it will lean more heavily into the technology that supports those goals, particularly AI that can streamline payment and risk models, improve coordination and automate care delivery in primary, specialty and mental health settings.

Specifically, Frist Cressey Ventures will be looking to fund companies that address the aging population, which is rapidly growing, Capra added. There's a need to improve medication management, access to treatments and cost of care for older adults. For example, one of the first investments in the fourth fund is in Aradigm, a benefits platform for cell and gene therapies.

What FCV is moving away from
When it comes to companies that the firm is looking to steer away from, Capra said that it's becoming more challenging for employer-focused, condition-specific point solutions. This comes as employers are dealing with significant cost pressures.

Soundbite
"I think no longer can you just be an employer benefit for X disease," Capra stated. "I think that the single point solutions will no longer survive, especially in the commercial market. I think employers are going to be thinking on a bigger scale, around less disease state-specific and more, how do consumers engage with their health from the get-go, and then, how do I steer them to the right points along the way?"

— By Marissa Plescia

Novartis Turns to Startup for R&D of New Cardio Drugs

Peptides from a platform technology
Novartis is pursuing new drugs for cardiovascular disease through a new collaboration with Unnatural Products (UNP), a startup with a platform technology that develops macrocyclic peptides for targets that have historically been considered undruggable. Marcocyclic peptides are peptides formed into a circular shape that gives the potential therapy more versatility in the way it binds to targets. This approach could address targets that have eluded oral small molecules. UNP's technology has already led to alliances with BridgeBio Pharma, Merck and Argenx.

The deal
The Novartis alliance with UNP begins with $100 million in upfront and milestone payments in advance of an investigational new drug application (IND). Novartis is responsible for the preclinical research to support an IND filing as well as subsequent clinical development, regulatory submissions, and commercialization of any approved products from the alliance.

Why this matters
Entresto, the heart failure drug that is currently Novartis's top-selling product, has lost patent protection. No targets or cardiovascular indications for the UNP alliance were disclosed. But developing and commercializing a new cardio drug could help make up for the coming drop-off in Entresto revenue as generic versions take market share from that product.

Soundbite
"Advances in macrocyclic chemistry are opening entirely new avenues in drug discovery, allowing us to engage targets at a dose and with a pharmacological versatility not possible with many other approaches," said Muneto Mogi, global head of global discovery chemistry, biomedical research, Novartis. "We believe this collaboration positions both organizations to accelerate the development of new therapies with strong scientific and clinical potential."

—By Frank Vinluan

Why Simplicity, Not Consolidation, Is Key to Solving the Mental Health Crisis

Consolidation is not the answer
In reality, most licensed mental health clinicians in the United States still work independently. These solo or small group clinicians do not need layers of administrative oversight to deliver high-quality outpatient care. When independent practice becomes harder to sustain, the consequences are significant. Patients lose access to local care; employers and payers absorb higher costs; and clinician burnout accelerates. Instead of adding more layers of complexity to an already strained system, there's a more effective solution: make it simpler for independent clinicians to run a practice, participate in insurance networks directly, coordinate care, and provide treatment.

Building pressure
Many of the pressures clinicians face stem from how care is financed and managed, rather than how it is delivered. Payers tend to negotiate with large groups because it is operationally simpler; and as a result, solo and small practices are left with less leverage and fewer pathways to participate. Independent clinicians are rarely reimbursed for high-value work, such as coordinating with other providers or systems, collaborating with prescribers, or doing the additional work required to make measurement-based care meaningful.

Administrative and financial burden compounds the problem. Hours spent navigating insurance rules, billing issues, documentation, and follow-ups do not improve outcomes, yet they consume energy on top of already full schedules.

So while the system does not explicitly mandate consolidation, it consistently nudges clinicians in that direction. If independent practice is to remain viable, reimbursement incentives, policies, and technology must evolve together.

A simpler path forward
The capacity to meet the demand for mental health services already exists: Nearly a million licensed professionals providing mental health care in the United States are qualified to deliver care. The question is whether we will build systems that help them stay in practice, or continue to make it harder for them to do so.

Going forward, we can spend the next decade consolidating clinicians into larger organizations. Or, we can invest now in smarter policies, reimbursement models that align with the realities of outpatient care, and better systems that implement technological tools to more efficiently reduce burdens for independent clinicians.

— By MedCity Influencer Jonathan Selzer

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Danaher drops $10B on Masimo acquisition