Unpacking a record deal in the hottest part of healthcare

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Hello,

Welcome to Dispensed, Business Insider's weekly healthcare newsletter. Andrew Dunn checking in for this week's round-up. 

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Some highlights of the week: Pricing levels on coronavirus vaccines are coming into view, digital health saw its largest-ever deal (Telavongo!), and a buzzy primary-care startup went public. 

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Teladoc is acquiring Livongo in the biggest deal that digital health has ever seen. Here are the 3 key takeaways from Wall Street's top analysts, from shock at the price tag to optimism for healthcare's digital future.

Digital health companies have certainly not let a good crisis go to waste. And the coronavirus has turned into a doozy of a crisis.

Teladoc Health and Livongo Health have both seen surges in demand for their services — and stocks — stemming from the pandemic. Now, Teladoc is buying Livongo in the largest-ever deal for the growing digital health industry.

It's an open debate as to whether Teladoc overpaid or made a savvy deal to create a force in digital health. As BI's Blake Dodge reports, analysts think this deal "could prove to be more significant than the oft-touted ambitions of tech giants like Amazon."

But the interests of tech giants still hover over the entire space. Amazon, Google, and Microsoft have seized opportunities presented by the pandemic to move ahead in entering the $3.6 trillion US healthcare industry, Blake writes. As health systems go to the cloud and medical care moves online, the tech giants are offering a combination of tools and scale to play a role.

You can read the full story here>>

Blake also recently talked with Chris Sakalosky, Google's managing director of healthcare and life sciences, about these trends, particularly how Google is betting on telehealth services like Google Meet and bots.

The man who helps hospitals and clinics move to Google's cloud shares how the coronavirus pandemic is shaping its healthcare push

Moderna has already struck deals to sell small quantities of its coronavirus vaccine for almost twice as much as rival shots. Here's how the upstart biotech is thinking about pricing its vaccine.

A pricing controversy is brewing in the coronavirus vaccine race.

Some pharma giants have pledged not to profit off their vaccines during the pandemic, with the US government effectively paying $4 per dose for AstraZeneca's vaccine and $10 per shot for Johnson & Johnson's.

Moderna and Pfizer, on the other hand, have been clear they want to make a business out of their vaccines, while still vowing to behave responsibly. Pfizer reached a deal with the US at $19.50 per dose, leaving Moderna as the biggest mystery.

The Massachusetts biotech gave a clue on its earnings call this week, disclosing the company has already sold small quantities to other countries priced between $32 and $37 per dose. Moderna executives said large-quantity deals will carry a lower price. How much lower? That remains to be seen. 

Pricing debates may be getting a bit ahead of the actual research. We still don't know if any of the shots will work at preventing infection or disease. Morgan Stanley analysts are modeling that pivotal results will likely come for Moderna, Pfizer, and AstraZeneca in roughly three months. 

You can read the full story here>>

TIMELINE: Morgan Stanley says we should know if a coronavirus vaccine works by November. Here's how the bank expects the race for a cure to play out.

That timeframe aligns amazingly close to the November elections. President Donald Trump is already highlighting the fact a vaccine could be ready before Election Day.

The specifics matter here: It's possible to have data by then that shows an experimental shot works. But it's also exceedingly unlikely a vaccine will be widely available in 2020, given the massive manufacturing and distribution challenges.

Operation Warp Speed's own goal is having 300 million doses by January 2021. Keep in mind these leading vaccines are two-dose regimens, so reaching that aspirational goal equates to roughly 150 million treatment courses next January. In other words, less than half the US population. 

Beyond the immediate frontrunners, there are over 160 coronavirus vaccine programs in the works. Novavax, a small Maryland biotech, also released the first look at human data for its program, which appeared to show promising early results. The company plans to launch a large efficacy-focused trial this fall.

Catch up on the latest on the coronavirus vaccine race here>>

There are more than 160 research programs hunting for a coronavirus vaccine. Here's how the top drugmakers see the race for a cure playing out and when the first shots might be available.

The BI healthcare team has news of our own: Megan Hernbroth is writing about the healthcare startup and venture capital scene from San Francisco. Feed the healthcare team's newest senior reporter scoops, tips and pitch decks: [email protected].

Megan is already in the middle of it, covering the primary-care startup Oak Street's IPO this week. The three cofounders hold more than 10% of the startup, a combined stake worth almost $1 billion following the stock's 90% surge in its stock-market debut.

You can read the full story here>>

The hot healthcare startup Oak Street surged to a $9.5 billion valuation in its IPO. Here are the investors and execs who stand to make the most.

Megan also talked with Oak Street CEO Mike Pykosz about the path to profitability, which includes opening more clinics and reaching more patients.

That wraps this week's Dispensed. Keep me posted on what to watch in the drug industry at [email protected]. Or get in touch with the whole healthcare team at [email protected].

- Andrew