Headquartered in Greenwich, Connecticut, Great Point Partners began a growth recapitalization of portfolio company Alliance Biomedical Research (ABR) in September 2016. ABR conducts FDA clinical trials at 11 sites in the Southeastern United States.
Required for the marketing and distribution of prescription drugs, the FDA approval process takes place in four stages. Here is a quick overview of what each phase entails.
Phase I: Conducted with no more than 100 subjects, Phase I studies evaluate the pharmacology and safety of a drug. Dosage starts low and gradually scales up to assess the drug’s effects in the body.
Phase II: Drugs in this stage of the approval process are studied to determine their effectiveness in treating a specific disease. During this phase, researchers attempt to establish the effective dose, dosing interval, and method of delivery.
Phase III: Phase III studies take the findings from Phase II studies and expand them to a larger swath of the population, often recruiting many thousands of subjects. Results obtained during this phase have the sample size necessary to maximize statistical power.
Phase IV: Enacted after a drug has been brought to market, Phase IV studies assess the long-term effects of a drug or evaluate a drug’s suitability for off-label uses.
At the end of 2015, Great Point Partners, a Connecticut firm, announced the sale of its portfolio company Equian to New Mountain Capital, LLC, for $225 million. Equian has emerged as one of the most prominent health-care payment solution providers in the nation. The company’s integrity software ensures that health-care interactions are paid accurately and at the lowest cost. Both Inc. Magazine and Modern Healthcare have recognized Equian as a high-growth company in the medical field.
A Great Point Partners principal and member of the Equian board acknowledged the growth that both organizations achieved over the course of eight years of collaboration. Together, the organizations sourced 11 add-on acquisitions, financing them through multiple debt arrangements. Over this period, revenue grew by a compounded annual growth rate that exceeded 31 percent. Total earnings were increased more than tenfold.
The sale represents an opportunity for Equian, which will be able to provide even more products to its customers through a partnership with Trover Solutions that grew out of the acquisition.
Citra Health Solutions
With investments across many sectors of the health care industry in the United States, Canada, and Western Europe, Great Point Partners continues to grow. The health care investment firm has a particular interest in biopharmaceutical infrastructure, health care services, and information technology. Citra Health Solutions, one of Great Point Partners’ portfolio companies, recently announced that two of its accountable care organizations (ACOs) had saved clients a total of $11.2 million in 2014.
Citra helps meet the needs of medical providers and hospital systems by applying proprietary technology, analytics, and care management to expand growth opportunities and reduce costs. Its successes with the two ACOs, American Health Alliance and ACO Health Partners, were significant, as only 27 percent of ACOs nationwide received bonuses from the Centers for Medicare and Medicaid Services. With Citra’s assistance, American Health Alliance saved $4,756,401 and ACO Health Partners saved $6,476,300. These savings did not come at the cost to quality patient care, however; both organizations exceeded quality requirements by more than 80 percent.
Great Point Partners
Based in Connecticut, Great Point Partners (GPP) is a private equity firm with a focus on health care investments spanning North America and Europe. In late 2015, Great Point Partners announced that Citra Health Solutions, a GPP II portfolio company, had enabled a pair of managed accountable care organizations (ACO) to realize savings totaling $11.2 million.
The cost savings achieved by American Health Alliance and ACO Health Partners in 2014 were incentivized by a new Shared Savings Program. This provides physicians with a way of sharing in up to 60 percent of savings they enable, which in turn encourages the use of population health management programs that provide service delivery that is both cost effective and of consistently high quality.
In addition to generating major savings, the program was successful in improving patient satisfaction and surpassed quality requirements by approximately 80 percent. The GPP managing director described the transition toward a value-based reimbursement as presenting a complex mix of opportunities and challenges – the payoff being significant health system performance increases on a variety of levels.