Digital health company Thirty Madison scooped up assets, including 100,000 patient files and intellectual property, from The Pill Club in a deal valued at $32.3 million.
The Pill Club, an online birth control and telehealth company that once went by the name Favor, filed for Chapter 11 bankruptcy back in April after it faced Medicaid fraud charges in California, The Mercury Sun reported. The Pill Club reached an $18.3 million settlement with California authorities back in February over claims it defrauded the state's Medi-Cal program of millions of dollars in fraudulent insurance claims.
According to the California Department of Justice, the company billed Medi-Cal for services it hadn't provided, allegedly submitting claims for 30-minute face-to-face counseling sessions when its nurse practitioners didn't have direct or real-time contact with patients.
Thirty Madison, a virtual-first health clinic, merged with female-focused virtual care company Nurx back in February 2022. The startup provides telehealth visits and online prescriptions targeting hair loss, migraines, acid reflux and allergies, while Nurx provides birth control education and delivery as well as services like STI testing, HIV prevention with PrEP, and at-home HPV testing.
Company executives said the deal strengthens its position in women's health.
As part of the deal with Thirty Madison, patients from The Pill Club can transition to receiving care through Nurx to ensure continuity of care and support the medical adherence required for effective birth control. Patients also have the option to go to another provider, Thirty Madison executives said in a press release.
Thirty Madison says it treats nearly 1 million people, spending the last year successfully scaling its care model to reach more women under Nurx.
Patients who transition from The Pill Club to Nurx will have access to a range of additional options beyond reproductive care, including mental health and dermatology.
"When we talk about our value of being patient-first, we mean stepping up when patients are in need—especially when it comes to continuity of care," said Steven Gutentag, co-founder and CEO of Thirty Madison, in a statement. "We began our expansion into women's health by merging with Nurx. This asset purchase reinforces our continued commitment to support more women with care that is convenient, trusted and driven by outcomes. And we have the ability to introduce them to the broad range of care Nurx offers, which enables us to support them throughout their lifetime."
Thirty Madison launched its hair-loss treatment business, Keeps, in 2018, followed by Cove to serve migraine sufferers. Another brand, Picnic, offers targeted care and treatment for allergies. It also offers Facet for dermatology care. The company enables patients to easily access specialist-level care combined with the convenience of telemedicine and treatment delivery.
Thirty Madison launched its mental health program through Nurx in 2022, which now treats thousands of women with mild to moderate anxiety, depression, seasonal affective disorder, premenstrual dysphoric disorder, and postpartum and menopause depression, according to executives.
In addition to mental health care, patients have access to other specialty conditions impacting their overall well-being, including dermatology, migraine and sexual health.
The New York City-based startup jumped to a $1 billion valuation after snagging $140 million in its series C round in June 2021. The company has raised more than $210 million to date.
"Women make 80% of the healthcare decisions, but historically have not been operating in a system that is built for their healthcare needs," said Michelle Carnahan, president of Thirty Madison, in a statement. "We have begun a transformation in women's healthcare experience by driving access to the broad range of conditions we treat, ensuring no gaps in care, and building for outcomes. We have a unique opportunity in front of us, and we're excited to welcome new patients into what we are creating to provide them with the healthcare experiences they deserve."
Many health tech and digital health companies facing financial struggles in a more constrained economic market have either shut down or are trying to stave off bankruptcy by shedding assets and business units. This is driving more M&A as other companies look to pick up their tech capabilities.
Medly Health, parent company of a New York City-based digital pharmacy startup that took off during the COVID-19 pandemic, shut down at the end of the year. It sold its pharmacy assets including its patient data, pharmacy records and prescription drug inventory to Walgreens for $19.35 million, according to media reports.
Healthcare AI company Olive sold its artificial-intelligence-enabled utilization management solution for payers to health tech solution company Availity. It marked the second business unit Olive shed after the company laid off 450 employees nearly a year ago.
Back in March, mental health provider SonderMind bought struggling startup Mindstrong's technology and brought some of its leadership team on board as part of the deal.
Early-stage tech startup Florence picked up Zipnosis from troubled insurtech Bright Health to expand its virtual care capabilities.