Category Archives: Healthcare

Coya Therapeutics completes $15 million IPO

Leave a reply

Coya Therapeutics, a biotechnology company with its head office in the Galleria area, has completed its $15 million initial public offering (IPO). It will have a fully diluted market capitalization of $50 million.

The company is developing proprietary new therapies to enhance the function of regulatory T cells (‘Tregs’).  Tregs are a subpopulation of T cells (a type of white blood cell) that modulate the immune system. Tregs were first discovered in 1995. Coya is initially focused on therapies for neurodegenerative, autoimmune and metabolic diseases where Treg dysfunction has been identified as an important pathophysiological component of the disease.

The company’s leading prospect is for the treatment of amyotrophic lateral sclerosis, or ALS (sometimes called Lou Gehrig’s disease). Clinical trials are expected in the first half of 2024.

Coya was formed in November 2020 by Dr. Howard Berman. Prior to this, Dr. Berman worked at AbbVie Inc, Eli Lily and Novartis. He began his career at MD Anderson in the technology transfer division where he was responsible for assessing the market, patent and scientific merits of numerous oncology-based technologies.

The CFO/COO of the company is David Snyder, based in Austin. He joined in March 2022. COYA is the fourth biotechnology business he has brought to market as CFO.

The company has an exclusive license and sponsored research agreement with The Methodist Hospital.

The stock is listed on Nasdaq under the symbol COYA.

Coya is the 7th Houston-area company to complete an IPO in 2022. You can see the complete list of Houston-area public companies here.

Coya Therapeutics – S-1 filing

Sysco CFO resigns to take the same role at Cardinal Health

Leave a reply

Aaron Alt, the CFO of Sysco, the food distributor, has resigned to become the CFO of Cardinal Health, based in Dublin, Ohio.

Mr. Alt had been the CFO at Sysco (market cap $40 billion) for just over two years. Prior to that, he was CFO at Dallas-based Sally Beauty Holdings and also worked for Target and Sara Lee Corporation. He holds an M.B.A. from J.L. Kellogg School of Management at Northwestern University.



At Cardinal (market cap $20 billion), Mr Alt will receive a base salary of $825,000. That’s a small increase on his base at Sysco ($791,000). He will also receive a cash sign-on bonus of $1 million and a lump sum payment of $250,000 for his intended relocation. Mr. Alt will also be eligible for annual long-term stock incentives with a target value of $3.5 million. That’s about a $1 million higher than his annual target at Sysco.

In August, the Cardinal CEO Mike Kaufmann resigned, to be replaced by CFO Jason Hollar. The following week, activist shareholder Elliott Management took a large stake in the business. Cardinal has sinced agreed to appoint an Elliott representative to the board and appoint four other new independent directors.

Cardinal has under-performed its competitors in the past few years and, according to the Wall Street Journal, Elliott will likely push for the sale of the medical supplies business.

Sysco appointed Neil Russell, Senior VP of Corporate Affairs and Chief Communications Officer, as its interim CFO. The company has commenced a search for Mr. Alt’s successor.

SEC filing – 8-K Cardinal Health CFO

Carriage Services CFO to depart by end of year

Leave a reply

Ben Brink, the CFO of Carriage Services Inc, has announced he will be leaving at the end of the year to pursue other opportunities. The company has begun a search for a new CFO. Mr. Brink will assist the new CFO in a consulting capacity for the first six months of 2023.



Carriage Services is a leading provider of funeral and cemetery services and merchandise in the United States. Carriage operates 169 funeral homes in 26 states and 31 cemeteries in 11 states. The company has a market capitalization of $473 million.

Mr. Brink, who is 41, began his career at International Paper. He joined Carriage in 2009 as a Cash Manager and was promoted to CFO in 2015.

Chairman and CEO Mel Payne issued a very effusive press release praising Mr. Brink’s contributions to the company’s recent development. In the press release, the CEO stated that he offered Mr. Brink a severance payment of $1 million in cash or 30,000 shares (worth $965,000 at Friday’s close). Mr. Brink chose to take the shares.

SEC filing – 8-K Carriage CFO

Ex-wife indicted in $600,000 Medicaid fraud

Leave a reply

Kay Le Farmer, who lives in Katy, has been indicted for defrauding Medicaid of more than $600,000.

Her ex-husband is a licensed professional counselor, who operated a practice in West Houston from 2009 to 2013. Ms. Farmer and the counselor were married from 2000 to 2014. They separated in 2013 and divorced the following year.



From 2012 until 2013, Ms. Farmer was the office manager for the practice and had access to patient information as well as the practice’s billing records. In June 2013, it is alleged she began billing Medicaid for services not provided by her now ex-husband. She channeled the funds received to a newly-opened bank account that she controlled.

The fraud continued even after Ms. Farmer began employment as an office manager with a Pediatrician in Katy. Between November 2017 and March 2018, she submitted claims for 25 patients associated with the Pediatrician for psychotherapy services purportedly provided by her ex-husband.

In total, from June 2013 until June 2018 Ms. Farmer billed Medicaid $617,000. She was paid about $475,000, which she then transferred to her personal accounts.

In 2018, when one of the insurance companies requested records from Ms. Farmer regarding services billed, she requested a records extension and falsely claimed her ex-husband had suffered a massive stroke and was in hospital.

If convicted, Farmer faces up to 10 years in federal prison and a possible $250,000 maximum fine for each count of health care fraud. She was indicted on 22 counts (each count represents a specific fraudulent claim made in 2017 or 2018).

https://www.justice.gov/usao-sdtx/pr/therapist-s-ex-wife-charged-defrauding-medicaid-and-stealing-patient-information

Houston biopharma company replaces its CFO

Leave a reply

Aravive, a Houston biopharmaceutical company, has replaced its CFO. Vinay Shah, who has been CFO since 2010, has resigned and Rudy Howard appointed in his place.

The company is conducting clinical trials on a protein that inhibits the signals produced by the AXL protein. These signals help proliferate tumors and cause the body to suppress its immune system. The trials are being conducted on patients with ovarian, kidney or pancreatic cancers.

Aravive went public in October 2018 via a reverse takeover of Versartis, a biopharma company based in California. The transaction valued the company at $39 million. Currently, the company has a similar market cap with its share price being $1.21. A year ago, its share price was around around $5-$6.

Mr Shah will receive a severance payment of $286,443 (nine months, paid monthly) and will enter into a consulting contract for four months with a monthly payment of $44,557.

Mr. Howard will receive a base salary of $395,000. He also received stock options on 290,000 units that will vest over four years.

Mr. Howard was previously the CFO of vTv Therapeutics, a struggling biopharma company, based in North Carolina. He resigned in December 2021, receiving a one year severance payment of $325,000. At that time, the company let go 16 of its 25 employees.

SEC filing – Aravive CFO

Dental clinic operator indicted for not paying $1.7 million in taxes

Leave a reply

Jonathan Louis Lepow, a dental clinic operator, has been indicted for failing to pay $1.7 million in employment taxes to the IRS.

Lepow operated the business side of his father’s dental practice, Kenneth A Lepow, DDS, Inc (‘Lepow DDS’) between 2005 and 2017. The practice is based in NW Houston.

According to the indictment, around 2012, Lepow stopped paying employment taxes to the IRS. The IRS assigned a Revenue Officer in 2014, who began contacting Lepow to bring the business into compliance. The outstanding tax obligation for 2012-2016 was $1.7 million.

Instead, Lepow allegedly deposited funds from Lepow DDS into the bank accounts of the Texas Center for Continuing Education. Beginning in 2016, he also allegedly deposited funds into the bank accounts for the benefit of Top Tree Agency Corp, a marijuana marketing business in Seattle.

If convicted, Lepow faces up to 10 years of imprisonment and a possible $250,000 maximum fine.

Lepow DDS filed for Chapter 7 bankruptcy in 2017.

https://www.justice.gov/usao-sdtx/pr/dental-clinic-operator-arrested-failing-pay-17-million-taxes

Houston healthcare company goes public via reverse takeover

Leave a reply

Nutex Health, a Houston-based operator of micro-hospitals, has gone public via a reverse takeover with Florida-based Clinigence Holdings.



Nutex owns and operates 14 facilities, with another 17 under construction. The hospitals offer emergency room care, inpatient care and behavioral health services. Most of the hospitals have less than 10 beds. Some of the hospitals are 100% owned by Nutex. Others are partly owned by physicians who provide services at that hospital.

Nutex was founded in 2011 by Chairman and CEO Tom Vo, M.D. The company has its head office in the Galleria area. It plans to open 100 micro-hospitals across the USA.

Clinigence started out as a healthcare information technology company. However, in early 2021, it pivoted to acquire AHP Health Management Services, which provides care for 22,000 patients in Los Angeles, though a network of 141 primary care physicians and 660 specialists.  AHP receives a fee per member, per month. Its shares were traded over-the-counter, but following the merger, the shares now trade on Nasdaq.

Nutex is forecasting revenues of $366 million for 2022 and an adjusted EBITDA of $201 million. In the merger it was valued $1.6 billion.

The CFO of the company will be Mike Bowen. He is based in Florida and has been the CFO of Accountable Healthcare America (AHA) since 2014. AHA, a medical management platform company, was acquired by Clinigence the same day it acquired AHP.

SEC filing – Nutex Health merger

10 Texas Doctors agree to pay $1.7 million to settle allegations of kickbacks

Leave a reply

Ten Texas Doctors, including five from the Houston-area, have agreed to pay of total of $1.68 million to resolve allegations involving illegal kickbacks. There was no determination of liability.



The cases revolve around Little River Healthcare, an operator of a hospital (and related clinics) based in Rockdale, TX, located between Austin and College Station. Little River went into bankruptcy in June 2018 and closed in December of that year.

The Scheme

Between 2013 and 2016, the hospital embarked on an aggressive growth strategy by adding surgery centers, diagnostic imaging centers and over 50 physician offices. It utilized third party laboratories to perform tests that the hospital itself was unable to perform. They created a way for physicians, who were ordering tests from out-of-network laboratories to provide those services in-network through Little River’s hospital contract with Blue Cross Blue Shield (BCBS).

Unfortunately, this way also involved volume-based commissions paid to independent contractor recruiters, who used management service organizations (MSO) to pay doctors for their referrals. That is illegal under Medicare, Medicaid and other federally funded programs. The scheme ran from 2015 to 2018.

Settlements

The Houston doctors involved are (together with the settlement they have agreed to pay);

  • Tamar Brionez, M.D., Spring – $85,006
  • Rakesh Patel, D.O., Houston – $174,539
  • Cuong Trinh, M.D., Houston – $45,056
  • Randall Walker, M.D., Magnolia – $60,898
  • Michael Whiteley, D.O., Tomball – $52,015

The largest settlement involved Gary Goff, M.D. of Dallas who agreed to pay $454,088.

Back in January, in a related case involving Little River Healthcare, seven TX doctors and a hospital CEO agreed to settle allegations of kickbacks for $1.1 million.

Arbitration award

In 2016, BCBS started investigating Little River’s billing practices in relation to third party laboratories and started withholding payments to Little River. That caused a severe liquidity crisis for Little River which forced it into bankruptcy. Prior to bankruptcy, Little River had filed for arbitration in its dispute with BCBS. In May 2020, a Texas arbitrator awarded Little River $108 million.

 

https://www.justice.gov/usao-edtx/pr/ten-texas-doctors-and-healthcare-executive-agree-pay-over-168-million-settle-kickback

Healthcare waste management company appoints new CFO

Leave a reply

Eric Bauer has been appointed the new CFO at Sharps Compliance Corp. He is replacing Diana Diaz, who is staying on with the company as its Chief Accounting Officer. Ms. Diaz had been the CFO since June 2010.



Sharps is a waste management company that handles medical, pharmaceutical and hazardous waste for small to mid-size companies such as pharmacies, dentist offices and nursing homes. The company went public in 2009 and has a market capitalization of $120 million. Its head office is just south of NRG Stadium.

Mr. Bauer was the CFO at Nuverra Environmental Services until its acquisition by Select Energy Services last week. He joined Nuverra in April 2020 on a three-year contract as interim CFO. Before that he worked in investment banking at Evercore Partners, CITI and Lehman Brothers.

For the year ended June 30, 2021, revenues at Sharps increased by almost 50% to $76 million, primarily driven by waste disposal related to Covid-19 vaccines. Since then, the company has made two small acquisitions in October 2021 for $2.2 million and in February 2022 for $4.3 million. The company has a growing cash pile – $32.5 million at December 2021 – and is looking to make more acquisitions.

Mr. Bauer will receive a base salary of $275,000. That’s the same base that Ms. Diaz was receiving.

SEC filing – 8-K – Eric Bauer CFO

Court assesses $170 million in penalties against two Houston opthalmologists

Leave a reply

A US District Judge has assessed penalties of $170 million on Dr. Mustapha Kibirige and Dr. Emelike Agomo in relation to fraudulently billing Medicare.



Dr. Libirige owns and operates Outreach Diagnostic Clinic, based in the midtown area of Houston. Dr. Agomo joined the clinic in 2010. The clinic examines patients for glaucoma.

Between February 2006 and December 2011, the clinic billed Medicare for the glaucoma tests performed. Devices that measure eye pressure using a portable pen or puffs of air are billed under one billing code. Imaging scans of a retina are billed under a separate code which has a higher reimbursement rate.  The clinic was performing the former, but billing under the latter.

The clinic submitted 14,450 claims in this manner and received $807,450 in payments from Medicare.

An optometrist at the clinic, who started in 2005, became uncomfortable with the billing practices. In June 2012, he resigned, having failed to persuade Drs. Kibirige and Agomo to change their practices. He later blew the whistle.

The government won a summary judgment in March 2020 against the clinic. As a result, the judge assessed a penalty of

  • Treble damages of $2,422,350
  • A penalty of $11,803 for each claim submitted or $170,553,350.

$11,803 is the minimum penalty that could have been assessed under the statute.

https://www.justice.gov/usao-sdtx/pr/court-assesses-more-170m-penalties-against-two-area-ophthalmologists

Summary Judgment – Damages