Bicycle Health in the News:

• Bicycle Health named on the, "TIME100 most influential companies of 2022"
• Bicycle Health announces 5 new payer partnerships, including BCBS Texas
• More Startups Founders Are Tackling Addiction: Here’s Where The Money Is Going

The US Department of Health and Human Services (HHS) declared the opioid epidemic a public health emergency and announced a 5-Point Strategy To Combat the Opioid Crisis in 2017. Since then, the number has gotten even worse: 70,630 Americans died from drug overdose in 2019, and the number increased to 105,000+ losing their lives due to opioid overdose in the 12 months in 2021, exacerbated by the COVID-19 pandemic. The numbers paint a dire picture and call for immediate solutions.

When patients do choose to seek help, existing solutions are inaccessible and, oftentimes, inadequate to provide long-term solutions:

Bicycle Health's telemedicine addresses the problem of inaccessibility with existing treatments in the market. Enabled by technology, the optimization and tracking are built in to all phases of the patient journey, including patient-centered team based care, integrated behavioral health, and chronic disease management in order to successively care for the patients' health.

Ankit Gupta, MS, is the Founder and CEO of Bicycle Health. He is passionate about the power of technology to create patient-centered experiences that can deliver high quality outcomes at scale.

Prior to Bicycle Health, Ankit was Co-Founder and Chief Technology Officer (CTO) of Pulse News. With over 30 million users and a shoutout by ex-Apple CEO Steve Jobs, Pulse was acquired by LinkedIn for $50M and now serves as the LinkedIn newsfeed. Ankit graduated from the Indian Institute of Technology, Bombay with a Bachelor’s in Computer Science, and he earned his Master of Science (MS) in Computer Science from Stanford University, specializing in machine learning.

The holistic treatment journey is often four-fold: 

1. Medications for addiction treatment
2. Recovery coaching and peer support
3. Integrated behavioral health
4. Case management & care coordination

The treatment has a proven track record of success: the Company reports that their treatment has been clinically shown to result in a 50% reduction in all-cause mortality and a 58% reduction in total cost of care. Most notably, 95% of patients overcome problematic opioid use in 1 week, according to Bicycle Health's records.

With 15,000+ patients served spanning 24 states, Bicycle Health is among the largest and fastest growing tele-OUD provider, with 10% growth month over month since launch. Bicycle Health has managed to reach ~$18M annual revenue run-rate. 

The Company is still rapidly acquiring new patients, with 1,100+ average new starts per month. The cost of acquisition is ~$400 per customer, for an average ~$3,800 customer lifetime value (24 months). On the payor side, Bicycle Health is acquiring payors at a faster rate than ever before. Starting in 2020 with only 4% of the revenue coming from payors, 40% of the current revenue is from payors nowadays, expected to grow to over 50% by end of 2022. 

Up to date, Bicycle Health has launched contracts with several commercial and medicaid plans over the last quarter: BCBS TX, McLaren Health in MI, Molina of MI, UHC AZ and several state medicaid plans. They have also completed national contracts with Cigna and Bright Health, and are in value based contract discussions with Magellan, Amerigroup, Beacon, Aetna medicaid, UHC Community and State, Anthem and more. The Company are also in the contracting process with Tricare and VA.

The Company was nominated by Time Magazine as one of the Top 100 Most Influential Companies in 2022.

Bicycle Health has two main lines of business:

• Self Pay: Patients pay $199 / month for unlimited care amongst a restricted bundle of services that includes medication management, group psychotherapy, group peer support, case management, care coordination and at-home drug testing.
• Billable care: The Company joins provider networks of payors (like Health plans, At-risk providers, etc.) where Bicycle Health bill payors for providing their entire range of services against a bundled payment model. The services include 1-1 psychotherapy and 1-1 counseling on top of the services available for self pay patients. The bundled payment model is typically risk based and can include a shared savings component or bonus payouts against key metrics like retention in treatment.

The Company will leverage data captured from patient interactions combined with thoughtful tech & R&D spend will enable continued margin improvement without compromising quality of care.

Additional insights

The business hires providers as FTEs as opposed to 1099 contractors, which is industry standard. They believe that as the digital health sector continues to grow rapidly and disrupt traditional healthcare, the winners will be decided through quality of care. The decision to keep providers in house provides better visibility, monitoring, and management of quality and patient outcomes. They believe this will serve as a key competitive advantage as the sector matures.

The business model also leverages Nurse Practitioners(NP) to control the cost of service. As they continue to scale, management is focused on maintaining a ratio of 80:20 NPs to MDs. This ratio allows Bicycle Health to control cost of service without compromising patient outcomes.

Bicycle Health positions themselves as being superior to their competitors at reaching patients, engaging them, and delivering the best care outcomes. 

• Employed clinician team: Their clinician teams are full time employed, delivering better outcomes and operational scalability than the 1099 model. 
• Technology-enabled: Bicycle Health makes accessing care easy, while also collecting the data necessary to improve outcomes.
• Robust diversion controls: Having telehealth in mind from the start as they build their products, Bicycle Health has a robust diversion control protocol that produces superior, clinically proven outcomes.

Management’s current preferred exit path is an initial public offering; however, a private market sale could transpire before market conditions & company maturity align for an IPO. The timing of the exit is dependent on overall market conditions and assumptions within Bicycle Health's long range plan materializing as expected.

According to the Company, their nationwide reach, scale, high gross margins and best-in-class outcomes make them a perfect acquisition target for companies, in the healthcare space, looking to augment or expand their current business. If they decide to sell the business through a private market transaction, to a strategic buyer, Bicycle Health believes the buyer will likely be a large insurance provider, pharmacy chain, digital care organization or large hospital system. These four markets are experiencing disruption and firms have been & will continue to seek out strategic acquisitions to augment their business models to reach new patients, provide OUD treatment, & improve overall quality of care.

• Payors: Health Plans like UHG and Cigna are moving into providing care through their counterparts like Optum and Evernorth. Given their national reach, Bicycle Health believes they would be a perfect acquisition target for these payors to enter the OUD space.
• Pharmacy chains: Walmart, CVS, Walgreens and others are moving into providing care through a few different business models. Given Bicycle Health's national presence and the incidence of OUD amongst the employees of these organizations as well as the communities they serve, the Company is confident they could be the perfect acquisition target to provide OUD care.
• Digital care organizations: Several digital healthcare organizations will seek service line expansions as competition grows. This includes Ginger/Headspace, Lyra, Amazon Care, Teladoc and more.
• Large hospital systems: Large hospital systems like Kaiser, HCA and Dignity are moving more and more towards full risk populations. The Company's service allows systems to expand their service lines while also decreasing total cost of care.

Bicycle Health is backed by strategic investors and has partnerships with key players in the industry:

In addition to the carried interest Republic Deal Room Advisor LLC is entitled to for the syndicated investments it organizes, certain principals of Republic Deal Room Advisor LLC may have a personal interests in these investments, as disclosed below. When making an investment decision please review any applicable disclosures as they represent pre-existing financial interests held by those principals of Republic Deal Room Advisor LLC.

We do not represent that the information contained herein is accurate or complete, and it should not be relied upon as such. Opinions expressed herein are subject to change without notice. Certain information contained herein (including any forward-looking statements and economic and market information) has been obtained from and/or prepared by the Company or other third-party sources and in certain cases has not been updated through the date hereof. While such sources are believed to be reliable, Republic Deal Room Advisor LLC does not assume any responsibility for the accuracy or completeness of such information. Republic Deal Room Advisor LLC does not undertake any obligation to update the information contained herein as of any future date.