Waud commits $100m-plus to medication-based services initiative

The Chicago PE firm has teamed up with Paul Jardina, who most recently served as the CEO of Onco360, an oncology-focused specialty pharmacy.

Waud Capital Partners has joined forces with seasoned healthcare executive Paul Jardina in a pledge to find and build out a new platform in the medication-based services industry. 

The Chicago mid-market firm will commit at least $100 million in equity capital to the company. 

The new venture will seek to acquire and build an organization that either directly administers medication services or supports the commercialization or distribution of medications.

More specifically, the initiative will evaluate opportunities spanning medication-based physician practices, such as rheumatology, neurology, allergy/immunology, ear nose and throat and infectious disease; specialized pharmacies; alternate site infusion pharmacies; and pharmaceutical hub and distribution services. 

“We’re focused on areas that have seen a lot of investment activity as well as certain areas of the physician practice management (PPM) world that haven’t seen as much,” Waud partner Chris Graber told PE Hub in an interview

For example, rheumatology and neurology PPM remain largely untouched by private equity, whereas infusion services, pharma services and other areas of PPM have drawn significant  institutional capital, Graber said.  

“These are really big markets. We can go a lot of different places,” added Jardina, who during his 25-year-long career so far has worked at the intersection of the PPM and pharmacy industries. The partnership won’t be looking to invest in a specific therapeutic area, he said. “What we will be looking for, in particular: an entity that has a really good clinical model, preferably has already built out some infrastructure… and has a clear strategy to build into a national platform.”

Jardina most recently served as CEO Onco360, leading the oncology-focused specialty pharmacy for six years. Previously, Jardina was CEO and president of US Physiatry and senior vice president of US Oncology, overseeing the latter’s multibillion-dollar pharmacy business and corporate development. 

The newly formed initiative will pursue opportunities that cut across different underlying healthcare themes, Graber and Jardina said.

“One, there is very substantial growth in areas related to biologics and medication [management],” Graber said. That pronounced growth is applicable not only on the pharmacy side, but through the administration of medication and other pharmacy services, he said. 

Further, Jardina added, the partnership will examine the increasing utilization of specialty care drugs, and as it relates, their high cost nature and in turn the need to manage them well. 

“If you are prescribing a drug at $15,000 a month, it’s very important from a pharmacy standpoint you manage it correctly,” Jardina said. 

Site of care medication management will also be looked at, Jardina said, pointing to the cost savings achieved within at-home and other alternate-site settings versus the hospital. 

On the PPM side, Graber added, there’s a growth opportunity around bringing together more comprehensive offerings and capabilities, as seen already in specialties like gastroenterology or ophthalmology – verticals in which Waud has already invested. Waud’s PPM investments include GI Alliance and Unifeye Vision Partners. 

Waud has a flexible timeline, but the growth-oriented firm through its executive partnership playbook has historically spent six to 12 months on average before executing an initial platform investment. 

The firm is prepared to build an organization from scratch, starting out small, or back a business of scale that may require a few hundred million dollars or more, Graber said.

Waud in February partnered with former MatrixCare CEO John Damgaard to kick off an initiative to acquire and build out a healthcare IT platform.

As of April, Waud has raised over $910 million for its fifth fund, according to an SEC filing. The target is $1.5 billion.

Action Item: Check out Waud’s latest Form ADV https://adviserinfo.sec.gov/firm/summary/160632