Oak HC/FT backs Infusion for Health, eyeing larger chronic disease management opportunity

The firm leads a $50m investment in the LA-based ambulatory infusion platform, whose run-rate revenue is currently north of $100m and expanding rapidly on top of that.

Oak HC/FT invested in Infusion for Health, identifying a vast opportunity for national expansion as it looks to stand up a new standard of quality for chronic disease management.

The firm is leading a $50 million funding into the ambulatory infusion platform, joined by existing investor Cimarron Healthcare Capital.

Dan McCarty, Infusion for Health

“The fact that the [ambulatory infusion] market is so nascent and fairly unsophisticated is driving savvy investors to say there’s a first-mover advantage to secure,” Infusion for Health CEO Dan McCarty told PE Hub. “A lot of centers are growing not because they’re doing it right, but because there are no good alternatives.”

Part one of Infusion for Health’s strategy is centered around replicating what it boasts is a convenient, high-quality, high-consumer experience service model for infusion therapy, the CEO said. Outside of the hospital, the platform also lends to a much more affordable setting for treatment.

“There is a greenfield opportunity to grow across the country,” Oak HC/FT co-founder and managing partners Andrew Adams said. “We’ve got a very well-run company and our capital is to scale it well beyond where it is today.” A growing pipeline of biologics and therapeutics that require infusion services will only add to the long-term opportunity, Adams noted.

In a market historically lacking optionality, there is real value in providing a more consumer-driven model comprising modern clinics with perks like on-demand entertainment and snacks, particularly in chronic disease states where patients are on treatment for multiple years at a time, McCarty said. The company reports a 95 percent net promoter score from its patients, all the while the broader infusion treatment market is growing at a 11 percent rate for the next five to seven years. 

“You can secure and create some really strong patient relationships that have an annuity value to them because of the length of care,” the CEO said. 

Infusion for Health, which provides adult and pediatric infusion services to more than 20 million lives in Southern California, treats complex and chronic conditions such as multiple sclerosis, Alzheimer’s disease, osteoporosis, Crohn’s disease, ulcerative colitis and arthritis. Typically, these patients require treatment for five to 10 years, and sometimes for the entirety of life.

Andrew Adams, Oak HC/FT, venture capital, healthcare, merger, m&a
Andrew Adams, Oak HC/FT

Beyond checking the boxes around lower costs, higher quality and consumer experience, Oak HC/FT is eager to solidify the platform’s position as a chronic disease management platform. “We think this is a pretty important first step to something more broad over time,” Adams told PE Hub

Infusion for Health will do this by building motes around its core infusion treatment centers to become integrated into the chronic care journey, McCarty said.

That will come in part by engaging with patients in earlier stages. “We’re big believers that we can actually help patients from progressing to infusion treatment just through better monitoring of adherence of their orals and self-injectables and by providing other holistic solutions around diet, nutrition and exercise,” McCarty said. 

Already on a fast growth track, the Thousand Oaks, California-based platform has more than quadrupled the size of its business and geographic reach in the past year. The company is growing at a north of 50 percent CAGR, with run-rate revenue north of $100 million and expanding rapidly on top of that, McCarty said.

Infusion for Health is looking to put 50 centers on the ground, up from 10 anticipated locations up and running by the end of 2021, McCarty said. Those centers can do close to 600 treatments a month, translating to about 7,000 treatments a year per facility, he continued.

“As we look at our long-term horizon, I’d personally say, if we’re not a billion-dollar top-line organization by the time this is said and done, I think we’ve probably left some meat on the bone,” added McCarty, who before joining Infusion for Health was a senior leader at McKesson’s Multi-Specialty infusion management and distribution business. 

Looking to replicate its proven strategy in Los Angeles, the company will remain focused on building density in markets in which it can create deep regional and local payor relationships. It will look to expand beyond its California roots and into both affluent and low-income populations across the country. All this while it looks to enter the pharmacy space, and as part of that, penetrate the home care setting in the coming year, McCarty said.

Another underlying driver? The opportunity to get into clinical trials, where it can act as a sub-investigator. 

“We also think that we can help within the disease state foster innovation by just enabling broader access, to one, trials, but two, [by helping] the manufacturers get more disparate and diverse patients for their therapies.”