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People line up outside of the shuttered Silicon Valley Bank headquarters.
Justin Sullivan/Getty Images
As the cofounder and COO of Pair Team, Cassie Choi helps provide health and social support services to around a thousand low-income Californians. The San Francisco-based startup combines software with teams of community health workers, nurses and therapists to make sure people who might otherwise fall through the cracks in the state’s Medicaid program – people who may be experiencing homelessness, dealing with severe mental illness or transitioning out of prison – get the right care. Her company, which has raised around $12 million since 2019, kept all of its cash in one place: Silicon Valley Bank.
As rumors started swirling last week that SVB might collapse, she tried to log in on the bank’s website: “Our accounts weren’t visible. It was just blank, which was very terrifying,” says Choi. Her immediate concern was being able to pay employees the following week. She started creating other bank accounts and even ended up putting some of the payroll on her personal credit card. The FDIC stepped in on Sunday saying depositors would get all of their funds back above the insured $250,000 threshold, but it’s thrown even more uncertainty into an already precarious business environment. “Startups just have enough unknowns and enough risks that you’re always trying to mitigate,” she tells Forbes. “This one just feels so existential.”
That’s especially the case with the failure of SVB, analysts from Pitchbook said in a note released earlier this week: “it puts more pressure on a venture market that was already reeling from the slowdown in financing seen over the past year.” While deposits are being covered by FDIC, the agency can’t replace the bank’s role as one of the biggest lenders to VC-backed healthcare startups in the country. With investors pulling back on financing and other banks facing scrutiny and even potential failure, founders like Choi will have a hard road to navigate in the coming months.
DOJ Lawsuit Could Hinder Rite Aid’s Turnaround
The U.S. Department of Justice is suing Rite Aid.
Justin Sullivan/Getty Images
The U.S. Justice Department is suing Rite Aid and accusing the drugstore chain of “knowingly” filling unlawful prescriptions for controlled substances. The lawsuit comes as the drugstore chain has been losing money and closing stores in the face of competition from rivals, including CVS Health, Walgreens and Walmart.
Read more here.
Deals Of The Week
Fibrosis Therapeutics: Cambridge, MA-based Mediar Therapeutics announced that it’s raised $105 million in new financing, which includes an $85 million series A that was co-led by Sofinnova Partners and Novartis Venture Fund. The startup aims to develop novel therapies against fibrosis.
Precision Medicine: QurAlis, which is developing precision therapies against ALS and other neurodegenerative diseases, announced it has raised an $88 million series B round led by EQT Life Sciences.
Dermatitis Improvements: Dermavent, a subsidiary of Roivant Sciences, announced this week that its VTAMA cream met its primary Phase III endpoints in the treatment of atopic dermatitis. The non-steroidal topical drug was approved last year by the FDA for treatment of psoriasis.
Covid Cell Therapy: Biotech company Direct Biologics reported this week that its investigational treatment ExoFlo, an anti-inflammatory drug derived from bone marrow, hit favorable efficacy and safety targets in a phase 2 study against Acute Respiratory Distress Syndrome caused by Covid-19.
This Under 30 Alumna Is One Step Closer To Helping Your Dogs Live Longer
Celine Halioua, founder, Loyal.
Guerin Blask For Forbes
When Celine Halioua was named to the 2022 Forbes 30 Under 30 list, she told us: “There has never been a drug approved for aging for any species, dog or human. My core goal in life is to get the first drug approved.” Her company, Loyal, is working on longevity drugs for dogs. And last week she got one step closer as the FDA gave the OK for a clinical trial study design that focuses on helping dogs live longer rather than targeting a specific disease. She expects to begin enrolling canines later this year.
Read more here.
Other Healthcare News
Danish pharmaceutical company Novo Nordisk says it will lower insulin prices by 75%, following a similar move by Eli Lilly.
The FDA approved a new nasal spray that Pfizer says could offer “fast-acting” relief from migraines.
More than 40% of doctors surveyed by the American Medical Association said prior authorization requirements from insurance companies delay necessary care.
We lost an hour of sleep to “spring forward” into Daylight Savings Time this week. Here’s why the annual ritual may be bad for our health.
Across Forbes
Google’s ‘Peacetime’ CEO Sundar Pichai Faces Criticism As The AI War Heats Up
In High Stakes Divorce Battle, Estranged Wife Of Indian Software Tycoon Claims He Transferred Ownership Without Telling Her
This Startup Says It Can Breed A Better Tomato On Demand
What Else We are Reading
Why CRISPR babies are still too risky — embryo studies highlight challenges (Nature)
Denied by AI: How Medicare Advantage plans use algorithms to cut off care for seniors in need (Stat)
5 Things We’ve Learned from COVID in Three Years (Scientific American)
