One Medical (1Life Healthcare, Inc., Nasdaq: ONEM), a leading
human-centered and technology-powered national primary care
organization, today announced it has completed the acquisition of
Iora Health, a human-centered, value-based primary care
organization with built-for-purpose technology focused on serving
Medicare populations.
“One Medical is now even better positioned to
deliver better health, better care, and lower costs across every
stage of life,” said Amir Dan Rubin, Chair & CEO of One
Medical. “One Medical will extend its reach from children and
adults to even more seniors, across 28 existing and announced
combined geographies encompassing approximately 40% of the U.S.
population, with a national potential addressable market of
approximately $870 billion. One Medical’s demonstrated ability to
delight and attract members, enable improved health outcomes,
reduce the cost of care, and simultaneously deliver results for
multiple key stakeholders will now be extended further in pursuit
of our mission to transform healthcare.”
“One Medical and Iora have common mission-driven
cultures, built-for-purpose technologies for our respective care
models, and best-in-class teams, including salaried providers. In
joining with One Medical, we can now deliver the best care and
value to more people and in more geographies across the U.S.,” said
Rushika Fernandopulle, Co-Founder of Iora Health and Chief
Innovation Officer of One Medical.
As of July 31, 2021, Iora took care of
approximately 39,000 total patients, including 31,000 At-Risk
members, 3,000 Consumer and Enterprise members, and 5,000 Other
Patients.
Transaction Details
Pursuant to the merger agreement previously
announced on June 7, 2021, One Medical issued or has reserved for
issuance approximately 56 million shares in the transaction
(including shares underlying options).
Financial Outlook
One Medical provides forward-looking guidance on
membership count, revenue, care margin, and adjusted EBITDA. Care
margin and adjusted EBITDA are non-GAAP measures. With the
completion of the acquisition of Iora, One Medical is providing an
update with regards to the third quarter 2021 and fiscal year 2021
outlook as set forth below. This update includes the contribution
of Iora to One Medical’s financial results beginning September 1,
2021 to the third quarter 2021 and fiscal year 2021 outlook.
|
|
Three Months
Ending September 30, 2021 |
Twelve
Months Ending December 31, 2021 |
In $ millions, except membership data |
|
Low |
High |
Low |
High |
Consumer
& Enterprise Members (1) |
|
660,000 |
665,000 |
685,000 |
690,000 |
At-Risk
Members (2) |
|
31,000 |
32,000 |
32,000 |
33,000 |
Total Members (3) |
|
691,000 |
697,000 |
717,000 |
723,000 |
One Medical
Revenue |
|
$113 |
$120 |
$475 |
$485 |
Iora Health
Revenue |
|
$27 |
$28 |
$111 |
$114 |
Total Revenue |
|
$140 |
$148 |
$586 |
$599 |
Care
Margin |
|
- |
- |
$171 |
$180 |
Adjusted EBITDA |
|
- |
- |
$(40) |
$(45) |
- A Consumer & Enterprise member is a person who has
registered with One Medical and has paid for membership for a
period of at least one year or whose membership has been sponsored
by an enterprise or other third party under an agreement having a
term of at least one year. Consumer & Enterprise members do not
include virtual-only One Medical Now users and any temporary users
as part of One Medical’s community service. Consumer &
Enterprise members provided above include a projected contribution
of approximately 3,000 members from Iora.
- An At-Risk member is a person for whom One Medical is
financially responsible for managing the member’s healthcare costs,
for example through Medicare Advantage or Medicare Direct
Contracting.
- Total Members exclude approximately 20,000 Other Patients as of
July 31, 2021. “Other Patient” refers to a person who is neither a
Consumer & Enterprise member nor an At-Risk member, and who has
received digital or in-person care through One Medical over the
last twelve months. Other Patients include a projected contribution
of approximately 5,000 Other Patients from Iora.
Membership data is rounded to thousands.
Management has not reconciled forward-looking non-GAAP care margin
and adjusted EBITDA to their most directly comparable GAAP measures
of loss from operations and net loss, respectively. This is because
we cannot predict with reasonable certainty and without
unreasonable efforts the ultimate outcome of certain GAAP
components of such reconciliations, including market-related
assumptions that are not within our control, certain legal or
advisory costs or others that may arise, without unreasonable
effort. For these reasons, we are unable to assess the probable
significance of the unavailable information, which could materially
impact the amount of the future directly comparable GAAP measures.
See below for additional important disclosures regarding our
non-GAAP financial measures. Our definition of adjusted EBITDA has
been revised from our previous reports of adjusted EBITDA to also
adjust for certain legal or advisory costs prospectively from the
first quarter of 2021, and adjust for acquisition and integration
costs prospectively from the second quarter of 2021.
Non-GAAP Financial Measures
Care Margin: We define care
margin as loss from operations excluding depreciation and
amortization, stock-based compensation, general and administrative
expense and sales and marketing expense. We consider care margin to
be an important measure to monitor our performance, specific to the
direct costs of delivering care. We believe this margin is useful
to measure whether we are controlling third party medical and our
direct expenses included in the provision of care sufficiently and
whether we are effectively pricing our services.
Adjusted EBITDA: We define
adjusted EBITDA as net income (loss) excluding interest income,
interest expense, depreciation and amortization, stock-based
compensation, change in the fair value of our redeemable
convertible preferred stock warrant liability, provision for
(benefit from) income taxes, certain legal or advisory costs, and
acquisition and integration costs that the Company does not
consider to be expenses incurred in the normal operation of the
business. Such legal or advisory costs may include but are not
limited to expenses with respect to evaluating potential business
combinations, legal investigations, or settlements. Acquisition and
integration costs include expenses incurred in connection with the
closing and integration of acquisitions, which may vary
significantly and are unique to each acquisition. We made this
update to prospectively exclude from our presentation certain legal
or advisory costs from the first quarter of 2021 and acquisition
and integration costs from the second quarter of 2021, because
amounts incurred in the prior periods were insignificant. We report
adjusted EBITDA because it is an important measure upon which our
management assesses and believes investors should assess our
operating performance. We consider adjusted EBITDA to be an
important measure because it helps illustrate underlying trends in
our business and our historical operating performance on a more
consistent basis.
We believe that these non-GAAP financial measures,
when taken together with the corresponding GAAP financial measures,
provide meaningful supplemental information regarding our
performance by excluding certain items that may not be indicative
of our business, results of operations, or outlook. However,
non-GAAP financial information is presented for supplemental
informational purposes only, has limitations as an analytical tool
and should not be considered in isolation or as a substitute for
financial information presented in accordance with GAAP. In
addition, other companies, including companies in our industry, may
calculate similarly-titled non-GAAP measures differently or may use
other measures to evaluate their performance, all of which could
reduce the usefulness of our non-GAAP financial measures as tools
for comparison.
Available Information
One Medical intends to use its Company website
(including its Investor Relations website) as well as its Facebook,
Twitter and LinkedIn accounts as a means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD.
Forward-Looking Statements
This press release contains forward-looking
statements about us and our industry that involve substantial risks
and uncertainties and are based on our beliefs and assumptions and
on information currently available to us. All statements other than
statements of historical facts contained in this press release,
including statements regarding our future results of operations,
financial condition, business strategy and plans and objectives of
management for future operations and statements about One Medical's
agreement to acquire Iora Health, Inc., are forward-looking
statements. In some cases, you can identify forward-looking
statements because they contain words such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” or “would,” or
the negative of these words or other similar terms or
expressions.
Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Forward-looking statements represent our current beliefs, estimates
and assumptions only as of the date of this press release and
information contained in this press release should not be relied
upon as representing our estimates as of any subsequent date. These
statements, and related risks, uncertainties, factors and
assumptions, include, but are not limited to: our ability to timely
and successfully achieve the anticipated benefits and potential
synergies of the transaction; the strength of the One Medical
brand; member satisfaction with our services and support; the
effects of the COVID-19 pandemic and related self-isolation and
quarantine measures on our business, revenue, future growth and
results of operations; anticipated membership growth and revenue
potential from our members; our ability to retain members; our
ability to successfully introduce and drive adoption of new
products; changes in the pricing we offer our members; our
relationships with our health network partners and enterprise
clients and any changes to, accommodations in or terminations of
our contracts with the health network partners or enterprise
clients; our ability to improve cost of care and margins, including
timing and expenses of new office openings and entry into new
geographic markets; changes in laws or regulations; our involvement
in existing and potential litigation, including medical malpractice
claims and consumer class actions; any governmental investigations
or inquiries, including those related to COVID-19 vaccine
administration or challenges to our relationships with the One
Medical PCs under the administrative services agreements; our
strategic plan; our financial outlook; our focus areas for
investment and our investments; announcements by us or our
competitors of business or strategic developments; and our overall
business trajectory. These risks are not exhaustive. Except as
required by law, we assume no obligation to update these
forward-looking statements, or to update the reasons actual results
could differ materially from those anticipated in the
forward-looking statements, even if new information becomes
available in the future. Further information on factors that could
cause actual results to differ materially from the results
anticipated by our forward-looking statements is included in the
reports we have filed or will file with the Securities and Exchange
Commission, including our Quarterly Report on Form 10-Q for the
Quarter ended June 30, 2021. These filings, when available,
are available on the investor relations section of our website at
investor.onemedical.com and on the SEC’s website at
www.sec.gov.
About One Medical
One Medical is a membership-based and
technology-powered primary care platform with seamless digital
health and inviting in-office care, convenient to where people
work, shop, live, and click. Our vision is to delight millions of
members with better health and better care while reducing costs.
Our mission is to transform health care for all through our
human-centered, technology-powered model. Headquartered in San
Francisco, 1Life Healthcare, Inc. is the administrative and
managerial services company for the affiliated One Medical
physician owned professional corporations that deliver medical
services in-office and virtually. 1Life and the One Medical
entities do business under the “One Medical” brand.
About Iora Health
Iora Health is building a different kind of health
system to deliver high impact relationship-based care. With a
mission to restore humanity to health care and a goal to transform
healthcare overall, Iora Health’s care model provides extraordinary
service to patients to enable improved health outcomes while
lowering overall health costs. Our patients enjoy the benefits of
better access to care, office- and non-office-based encounters
(e.g. phone, text messages, and email), an accessible and
transparent medical record, and robust educational offerings. Our
practices across the U.S. enjoy the benefits of smaller panel
sizes, closer relationships with patients, and the opportunity to
lead systemic change in health care delivery while working with a
true team.
Media Contact: Kristina Skinner,
One Medical Senior Director of External Communications
press@onemedical.com 650-743-5187
Investor Contact: Bob East or
Asher Dewhurst, Westwicke onemedical@westwicke.com 443-223-0500
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