Babylon Health’s efforts to secure funding and stabilize its operations have been thwarted due to the collapse of a planned merger with digital therapeutics company MindMaze. This merger, which would have returned Babylon to private ownership, has fallen apart, leaving the telehealth company facing the looming possibility of entering administration.
The rescue deal, which had been agreed upon in June, has unraveled, causing Babylon to encounter significant challenges. It has already taken the step of shutting down its operations in the United States, resulting in the loss of 94 jobs. In light of these circumstances, Babylon is currently seeking a buyer for its UK operations.
Babylon, headquartered in the UK, had previously gone public in 2021 through a merger with a special purpose acquisition company (SPAC). The company initially went public with a share price close to $243 and a market capitalization exceeding $3.5 billion. However, in June, its shares were delisted from the NYSE and are now valued at $0.02 on the OTC market, with a market cap of $441,000.
In May, Babylon had announced its intention to relinquish ownership to its primary lender, Albacore Capital. This decision came shortly after the company reported first-quarter sales of $311 million and a net loss of $63 million, more than double the figure from the previous year.
Since the news of the MindMaze merger falling through, Babylon has not provided any updates. The company had stated in its announcement that it lacked a binding commitment for additional financing to sustain its business operations. It emphasized that it was exploring various strategic options to determine the best course for its UK business, including a potential sale to a third party. Discussions were underway with potential strategic partners to secure additional funding.
Should no agreement for financing or acquisition materialize, Babylon may be forced to consider filing for bankruptcy protection or exploring other avenues for the liquidation or dissolution of its UK business.
Babylon also shared that it is continuing with the sale of its Meritage Medical Network, an independent physicians association business that generated $400 million in revenues in the previous year.
The core focus of the 10-year-old company lies in primary care delivery, leveraging remote consultations with healthcare professionals and an AI-powered app for diagnosis, complemented by in-person healthcare services. In the UK, it operates GP at Hand, an online-first practice catering to over 100,000 registered NHS patients in the London area. This recent turn of events follows a series of acquisitions aimed at expanding its portfolio, including the inclusion of retail health kiosk business Higi and DayToDay Health, which offers digital clinical services for surgical patients.
