I was concerned when I read that HeartFlow and a SPAC; Longview Acquisition Corporation, had called off merger plans that would have taken the noninvasive, personalized cardiac tests company public.
To me, SPACs present significant upside to a private medtech company, an alternative path to IPOs and traditional M&A. I remember one client for whom Medi-Vantage was performing a conjoint analysis to support R&D and pricing strategy decision making support in preparation for its IPO and the heavy burden of paperwork required by the SEC.
The HeartFlow merger was called off as a “result of current unfavorable market conditions.” I can only imagine what the SEC paperwork burden for would have been for Heartflow, if they filed for an IPO after last weeks skittish performance on the market with stocks falling, bonds ascending and marked tension between the West and Russia.
HeartFlow makes the FFRCT Analysis, a noninvasive cardiac test for stable symptomatic patients with coronary artery disease (CAD). It uses data from CT scans to create a 3D model of the patient’s coronary arteries to assess the impact of blockage on flow. As the child of two parents with CAD, this technology has great personal value.
Physicians can use FFRCT to understand how the coronary blockage is impeding blood flow and create a treatment plan for each patient. Prior to the failed SPAC merger, HeartFlow raised $543 M including a $240 million Series E round in 2018. The SPAC merger would have allowed HeartFlow to accelerate the adoption of its FFRCT to disrupt the heart disease care continuum.
The Medi-Vantage place in the continuum of medtech funding is in the performance of due diligence to assess the viability of medial technology with the clinical buyer and the cost effectiveness with the financial buyer. Medi-Vantage did not perform due diligence for the Heartflow technology, but with greater than 100,000 patients tested with the technology, it would not have been difficult to find clinicians and hospital administrators that could have answered our questions. This type of M&A due diligence with the clinical and/or economic buyer is our bread and butter.
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