Outcome Health lawsuit casts shadow on $500M Series A round

Frank
October 27, 2018
31 Views

Less than one month after a Wall Street Journal article drew attention to Outcome Health employees who allegedly misled pharma advertisers about advertising data and performance, some major advertisers have stopped doing business with the company.

Outcome Health installs screens in doctors’ offices with educational healthcare content and generates revenue from advertising, particularly from pharma companies. CEO Rishi Shah said in a statement that it is reviewing more than 250 ad campaigns that ran on its network this year, and plans to turn files over to a third-party auditor for independent verification, according to The Chicago Tribune.

Now some equity investors who took part in a $500 million Series A round for the company earlier this year are suing Outcome Health. A complaint filed in New York State Supreme Court alleges that the cofounders CEO Rishi Shah and President Shradha Agarwal and the company misled them with false data and financial reports. The lawsuit calls for Shah, Agarwal and Outcome Health to return their investments in exchange for tendering their shares.

Among those investors are funds managed by an investment unit of Goldman Sachs Group Inc., Google parent Alphabet Inc., and Pritzker Group Venture Capital.

Of the funds raised in the Series A, $225 million was to be given to Shah and Agarwal, according to the suit. That portion was to be held in a subsidiary of Outcome Holdings called Gravitas. But the complaint alleges that Shah took steps to move funds, and it asks the court to order that those funds remain available.

Shah and Agarwal, issued the following statement on the topic of the lawsuit in an email from a spokesman:

Earlier this year to address some of the issues raised in The Wall Street Journal story, the company hired Winston & Strawn’s Executive Chairman Dan Webb to review concerns raised about the past conduct of certain employees. Shah noted at the time that if the company learns that a customer was misled,  it will share that promptly with the customer and remedy the situation immediately.

Shah also told The Wall Street Journal in an email that it has had growing pains “as every high growth company does” as it’s scaled from 4,000 to 40,000 doctors’ offices.

Photo: Mykola Velychko, Getty Images

The OpSus Healthcare Cloud by CloudWave is more than a cloud built for healthcare.

Download the report to learn more about preparations to leverage digital medicine throughout healthcare.

Frank’s source: https://medcitynews.com/2017/11/outcome-health-lawsuit/

 

You may be interested

OSF Innovation pairs up with MassChallenge to aid healthcare startups
About Health
0 shares0 views
About Health
0 shares0 views

OSF Innovation pairs up with MassChallenge to aid healthcare startups

Frank - Mar 20, 2019

OSF Innovation, which is part of Peoria, Illinois-based OSF HealthCare, has partnered with MassChallenge, an accelerator in Boston. More specifically,…

Filming death: Why dying people wanted me to capture their last moments
About Entertainment
0 shares0 views
About Entertainment
0 shares0 views

Filming death: Why dying people wanted me to capture their last moments

Frank - Mar 20, 2019

Frank's source: http://www.independent.co.uk/arts-entertainment/films/features/island-steven-eastwood-bfi-london-film-festival-a7979466.html  

TV Preview, Doctor Foster (BBC1, Tuesday 9pm): the emotionally searing drama concludes
About Entertainment
0 shares0 views
About Entertainment
0 shares0 views

TV Preview, Doctor Foster (BBC1, Tuesday 9pm): the emotionally searing drama concludes

Frank - Mar 20, 2019

Frank's source: http://www.independent.co.uk/arts-entertainment/tv/tv-preview-doctor-foster-bbc1-tuesday-9pm-a7968436.html  

Leave a Comment

Your email address will not be published.

19 − 2 =