Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds a slim solution for a fat problem and a laser for your brain.
First up this week is NewHope Bariatrics, which aims to operate a series of surgery centers catering to the dangerously obese. I say "aims to" because, as of now, there are no clinics. That could change soon, though. On Tuesday, the company announced $18.5 million in first-round funding from a series of investors, including Austin Ventures, Versant Ventures, and Square 1 Bank.
Why so much interest? Part of the allure may be an expansion of Medicare coverage. According to a February report from the Centers for Medicare and Medicaid, the feds are expanding coverage of bariatric surgery to Medicare beneficiaries. Some coverage, however, appears to be conditional on the use of high-volume specialist centers of the sort NewHope's founders envision.
What's more, NewHope arrives at a time when medical specialists are making headway. Consider Psychiatric Solutions (Nasdaq: PSYS), which operates a network of facilities dedicated to mental health. Or, for that matter, U.S. Physical Therapy (Nasdaq: USPH), which operates its own network of centers aimed at physical rehabilitation.
Stock performance for these and other companies like them has been mixed, but there's clearly a trend at work here. And NewHope's founders have had experience taking advantage of the prevailing winds as senior executives at MedCath (Nasdaq: MDTH) in their last gig. Color me intrigued enough to add NewHope to my list of IPO hopefuls.
Next up is Nanospectra Biosciences, which is working on a type of particle that, when combined with a laser, may be capable of safely destroying cancer cells. Talk about interesting technology!
Too bad it isn't further along. Last week, Nanospectra closed $1.7 million in early-stage funding, to bring its total financing to $3 million. That's a decent sum, but it's probably not close to what will be needed when (if?) the technology enters clinical trials. (Nanospectra says it will ask the FDA for permission to begin testing the technology on humans this year.)
Nevertheless, this is an area worth watching. Hospital networks such as Community Health Systems (NYSE: CYH), Triad (NYSE: TRI), and Tenet Healthcare (NYSE: THC) tend to make $0.03 or less per dollar of revenue. Higher-margin treatments, especially those that can be performed without an invasive procedure, would likely be a welcome addition at these facilities.
That's all for now. See you back here next week, when we continue the quest to find the next Wal-Mart.
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