Former Alphaeon CEO Begins New On-Demand App Business
Source: By Stephen Daily, Executive Editor, News, BMC
Thursday, April 06, 2017 | Management/Leadership
Ophthalmic industry veteran and entrepreneur Robert Grant is back in the news to promote his latest endeavor—an on-demand app that would let consumers schedule appointments to practitioners and top-tier physicians in specialized fields.
An article in USA Today, which refers to the new app as the “Uber of health care,” outlines Mr. Grant’s latest venture.
"We want to create an Uber-like service nationwide," Mr. Grant told USA Today. "One of the biggest challenges in health care is no one thinks of the patient experience—and yet we pay as much for health care as anything else."
"We're not trying to provide health services, but timely access to top-flight specialists," he added.
The concierge service, which will cost $2,000 annually for an individual and $3,500 for a family, is scheduled to launch in the fall and will initially be available to patients in a dozen cities. Patients will have the ability to book appointments from a pool of 1,500 specialists for urgent care and hospital concierge clinics, according to the article.
The company behind the app is Newport Beach, Calif.-based Concierge Key Health, of which Mr. Grant serves as CEO. The company’s website, which is still under construction, says only that it is the world's first on-demand app to “elite physician specialists.” The website also allows physicians and patients to reserve membership.
The new tech start-up comes less than a year after Mr. Grant stepped down as CEO of lifestyle health care company Alphaeon, the company he founded in 2013. Mr. Grant stated at the time that the move would allow him to focus more of his attention on Strathspey Crown Holdings, the Newport Beach, Calif.-based private equity firm and majority shareholder of Alphaeon. Mr. Grant serves as chairman at Strathspey Crown, and remains on the board at Alphaeon.
Change in Focus at Alphaeon
Originally, Alphaeon was promoted as “a unique, patient-centered company operating only in the self-pay lifestyle sector of health care, presently encompassing plastic surgery, ophthalmology and dermatology.”
Specifically in ophthalmology and aesthetics, Alphaeon made a big push through acquisitions and licensing deals. The firm announced six ophthalmic transactions from 2013 to 2015, according to Market Scope. These include the acquisitions of Lensar, Physicians Recommended Nutraceuticals, and Digital Solutions; plus, agreements to secure US regulatory approvals and to market products in the US with Schwind (excimer laser) and PhysIOL (trifocal IOL), and a marketing agreement with Vision Metrics.
With the allure of the lucrative patient self-pay platform, combined with the buzz about Alphaeon’s potential for going public, several of the world’s leading ophthalmologists bought into Alphaeon’s business plan—both figuratively and literally. Through multiple rounds of financing, individual investors, many of whom were physicians in ophthalmology and dermatology/aesthetics, poured millions of dollars into the pot. The company made its presence known at major conferences, throwing elaborate parties and networking events. But as momentum built, many deals, specifically in the ophthalmic sector, did not prove to be sustainable.
In November 2015, Alphaeon announced that it was acquiring Lensar, maker of the Lensar femtosecond laser system. The transaction was valued at up to $59 million in cash, stock, and assumed debt. But the deal was short-lived as Lensar decided to terminate the deal, a move that ultimately ended in Lensar filing for Chapter 11 bankruptcy in December 2016.
In June 2016, Integrity Digital Solutions, developer of the Integrity EMR for Eyes solution for ophthalmology practices, also terminated its intent to be acquired by Alphaeon. The decision came just 7 months after it originally agreed to be acquired.
In August 2016, Mr. Grant was replaced by Murthy Simhambhatla, who previously served as senior partner of Strathspey Crown, and before that as senior vice president at Abbott Laboratories and president of Abbott Medical Optics.
Around the time of that transition, a number of other prominent board members left their positions, including Christopher Cox, a former US Securities and Exchange Commission chairman, and Bill Link, cofounder of Versant Ventures, who left his role as chairman of Alphaeon’s board.
With the writing on the wall that its presence in ophthalmology was diminishing, Alphaeon put forth a plan in January 2017 to narrow its focus on aesthetic medicine.
“The company, like most startups, started with a very broad strategy but we have since then analyzed where we have the most impact [as well as] most effective in creating value,” Mr. Simhambhatla told the Orange County Business Journal in an article published in January.
No longer focusing on ophthalmology or dentistry, Mr. Simhambhatla said Alphaeon would continue to build out its credit division and online store ShoutMD.
“These are not new [initiatives], we just decided to put the company’s focus now entirely in these three areas,” Mr. Simhambhatla said. “I wouldn’t say any of the [past] acquisitions didn’t work, but it was like trying to fight 10 different fronts.”
In another sign of the problems facing the lifestyle health care company, Alphaeon, as noted in another Orange County Business Journal article, recently decided to downsize its headquarters in Irvine, Calif., from its nearly 53,000-square-feet office space to a modest 5,000-square-feet space. Alphaeon plans to vacate the larger property around June.
1. Swartz J. $2,000 health care app promises to be the Uber in its field. USA Today. April 6, 2017. https://www.usatoday.com/story/tech/2017/04/05/-demand-health-care-start-up-wants-uber-field/100092038/. Accessed April 6, 2017.
2. Harmon D. LENSAR Business Restructured in Wake of Demise of Alphaeon Ophthalmic Business. Market Scope. December 23, 2016. https://market-scope.com/breaking-post/lensar-business-restructured-in-wake-of-demise-of-alphaeon-ophthalmic-business/. Accessed April 6, 2017.
3. Hsieh S. Alphaeon’s New Plan: Narrow Focus. Orange County Business Journal. January 9, 2017. http://www.ocbj.com/news/2017/jan/09/alphaeons-new-plan-narrow-focus/, Accessed April 6, 2017.
4. Mueller M. Alphaeon Plans to Give Back HQ Space. Orange County Business Journal. February 6, 2017. http://www.ocbj.com/news/2017/feb/06/alphaeon-plans-give-back-hq-space/. Accessed April 6, 2017.
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