Babylon to sell its California Independent Physicians Association business

multinational digital health firm Babylon said it plans to sell its independent physician association business in California to focus on digital-first contracts.

The Meritage Medical Network is a group of approximately 1,800 doctors who provide personalized care in six counties in Northern and Central California. Babylon said separating from the network would allow the firm to focus on its core business model, its digital-first, value-based care contracts.

It said the proceeds from the sale would be sufficient to fund the company through profitability. when Babylon In its second-quarter earnings release in August, it said it was still evaluating how long it would take to reach profitability based on both cash flow and adjusted EBITDA, but the company was targeting no later than 2025.

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In addition to the sale of Meritage Medical Network, Babylon said its previously announced reverse share split will take place during the fourth quarter of this year.

Last month, the company said that Received notice from the New York Stock Exchange that it was not in compliance with a rule that required companies to maintain an average closing share price of at least $1 for 30 consecutive days. The purpose of the split is to boost the share price to prevent Babylon from delisting.

The company, which started in the UK, also said it plans to move to US domestic reporting status with the Securities and Exchange Commission in 2023. company recently contracted back in its home market with NHS Trusts, while it noted that its Q2 results in its US value-based care members increased 220% year-over-year.

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However, Babylon also Recently appointed Andrew Heine as Vice President of the Go-to-Market Team for Asia, Europe, Middle East and Africa. The company said it will manage Babylon’s contracts and partnerships and work to enhance its offerings and services in those regions.

On the record

“The sale of our IPA business and streamlining our reporting and governance processes will result in a more focused business, simpler structure, and stronger balance sheet,” Babylon founder and CEO Ali Parsa said in a statement.