Home Fairfield Wall Street and health care intersect for pair of Fairfield County companies

Wall Street and health care intersect for pair of Fairfield County companies

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Two Fairfield County technology firms that specialize in health care are raking in big bucks: One through a merger with an eye toward going public and the other via its own initial public offering.

On Feb. 12, Stamford genomics-testing company Sema4 entered a definitive agreement with CM Life Sciences to accelerate growth. That transaction — which values Sema4 at approximately $2 billion — is expected to provide up to $793 million in cash proceeds and includes a fully committed PIPE (private investment in public equity) of $350 million from such growth and life science investors including Casdin Capital, Corvex Management, Fidelity, Morgan Stanley Perceptive, SoftBank, T. Rowe, Viking and existing investors.

CM Life is a special-purpose acquisition company led by institutional investors Casdin Capital and Corvex Management.

Sema4
Sema4’s Stamford lab.

The deal is expected to close during the second quarter; upon closing, CM Life Sciences, which now trades as “CMLF,” will be renamed and its common stock will be listed on the Nasdaq global market under a name and a ticker symbol to be announced at a later date.

“The additional resources will allow us to greatly accelerate our business plans organically and inorganically, developing and bringing in more cutting-edge precision model solutions across multiple disease areas,” Sema4 founder and CEO Eric Schadt said.

Sema4 claims to have established the largest, most comprehensive and fastest growing integrated genomic and clinical data platform. Its database includes more than 10 million patient genomic profiles and de-identified clinical records, integrated and delivered in a way that enables physicians to proactively diagnose and manage disease.

“We exist in a remarkable period of time as the life sciences and broad health care industries undergo a technology-driven data revolution,” Eli Casdin said. “The disruptive promise in combining these genomic and clinical data sets, at the patient level, is profound but takes a team of experts, the right business model and lots of growth capital. We therefore could not be more excited to lend our partnership and fill the balance sheet for the foremost leader in the field, Eric Schadt and the expert team he’s assembled at Sema4.

“With an early start, unique business strategy and more than 150 leading data scientists, this is the premier company in one of the biggest, winner-take-most markets in life sciences,” he added.

The combined company is expected to receive proceeds of up to approximately $793 million at the closing of the transaction, up to $343 million of which will be paid to Sema4 stockholders, with the remainder utilized by Sema4 in its business

It will continue to operate under the Sema4 management team, led by Schadt.

“Eric has built a truly unique business at Sema4 with a combination of scale, growth and innovation that we rarely see,” CM Life Sciences Chairman Keith Meister said. “Revenues are projected to grow from $200 million to $500 million and gross margins to double from today to 2023, while Sema4 leverages its existing platform in women’s health and oncology to quickly grow into high margin relationships and partnerships across health systems and biopharma partners.”

The merger has been unanimously approved by both CM Life Sciences’ and Sema4’s board of directors.

Signify Health CEO Kyle Armbrester rings the opening bell at the New York Stock Exchange on Feb. 11 to mark the company’s initial public offering.

Meanwhile, Norwalk-based Signify Health — which offers a value-based care platform that uses advanced analytics and other technology to help move health services from medical facilities to the home — reaped a windfall with its IPO.

First announced last month, Signify was looking to raise $100 million in its initial public offering when it threw open the figurative doors on Feb. 10. Though its 3.5 million shares of Class A common stock were priced at $24 per share, they opened at $32 the following day — giving it a market capitalization of $7.12 billion, according to Reuters.

Ultimately the IPO raised approximately $564 million.

Signify Health trades under the “SGFY” symbol.

“When we formed Signify Health (in December 2017), our dream was to improve the quality of life for millions of Americans by driving better outcomes and activating the home as a key part of the care continuum,” Signify Health CEO Kyle Armbrester said in a statement. “As we move forward as a public company, we will continue to pursue our vision and focus on making a positive impact on the health of those we are privileged to serve.”

The company — which also maintains a headquarters in Dallas — is expected to use the funds raised by the IPO to pay expenses and to back further acquisitions and/or investments in other firms. It picked up Norwalk’s Remedy Partners last summer, thus establishing its presence in that city; Remedy CFO Steve Senneff retained that position and was also named Signify president.

In November, Signify acquired PatientBlox for an undisclosed amount. That firm, based in Alpharetta, Georgia, offers proprietary software and a patent-pending technology platform to enable prospective bundled payment programs for health care payers and providers.

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