LifeMasters Supported SelfCare Inc. has lined up $19 million in financing to back its expansion plans.
The Irvine-based disease management company inked a $12 million term loan with Orix Venture Finance LLC and a $7 million revolving credit line from Detroit-based bank Comerica Inc.’s technology and life sciences division.
LifeMasters said it plans to use the money to fund its growth, which includes opening a patient call center in San Antonio early in the second quarter.
LifeMasters runs a Web site that lets patients track medical records, appointments and prescriptions, and interact with nurses and health experts. In industry speak, it’s dubbed “disease management.” It also provides data mining and risk management services to healthcare providers.
The company counts more than 350,000 patients it works with on managing diseases such as heart problems, respiratory ills and diabetes. Many patients have chronic illnesses.
Customers also include commercial health plans, employers, public and private retirement systems, and government programs including Medicare and Medicaid.
Big clients include Hartford, Conn.-based insurer Aetna Inc., BlueCross BlueShield of Tennessee, the State Teachers Retirement System of Ohio and Florida’s Medicaid program.
Last month it was tapped by the federal Centers for Medicare & Medicaid Services to provide disease management services to 20,000 Medicare patients with chronic illnesses in Oklahoma.
LifeMasters was founded 11 years ago by David Goodman, a Harvard University-trained doctor and bioengineer. The company has attracted $42 million worth of venture funding since 1994.
Orix Venture is a unit of Japan’s Orix Corp. It has offices in Silicon Valley, Hartford, and New York. Orix typically finances mid-to-late stage companies.
Other investors include some of the technology industry’s heaviest hitters, such as the venture capital arm of Intel Corp., Lightspeed Venture Partners, and J. and W. Seligman & Co. Newport Beach-based Pacific Life Insurance Co. also has provided funding.
Intel has been a backer since 1998.
“LifeMasters was actually the first investment made out of that venture fund,” said Christobel Selecky, the company’s former chief executive, in a 2003 interview. (David Strand, LifeMasters’ former president and chief operating officer, replaced Selecky as chief executive in October. Selecky now is the company’s executive chairman.)
Intel’s interest in LifeMasters was spawned by the chipmaker’s chairman, Andy Grove. He was using the Internet to learn more about the prostate cancer he was battling during the mid-1990s, Selecky said.
The chipmaker also funded a study by LifeMasters that gave 50 people in their 70s and 80s computers and taught them how to track medical conditions online.
“What we found was that the people who were on the computer were more likely to enter the data into our system than those who were using the telephone,” Selecky said.
Of course, Intel’s motives in funding the LifeMasters study went beyond altruism,it was looking for ways to boost computer usage, which means more chip sales.
LifeMasters, which is privately held, should bring in sales of about $85 million this year. The company has 500 workers, most of whom are in south San Francisco, Rancho Cordova, Albuquerque, N.M., and San Antonio. The company has 25 employees in OC.
Meanwhile, another OC healthcare company nabbed some funding.
Medsphere Systems Corp., an Aliso Viejo medical software company, raised $7.5 million in a second round of venture funding that closed last week.
Azure Capital Partners of San Francisco led the round, joining prior investors Thomas Weisel Venture Partners of Palo Alto and Wasatch Venture Fund of Salt Lake City.
Medsphere named former Azure venture partner Larry Augustin as the company’s chief executive. Augustin, who founded VA Linux,now VA Software Corp.,replaces Steve Shreeve, who becomes the company’s chief technical officer.
