CVS is targeting next-generation health clinics following Amazon’s move to One Medical


CVS Health Corp. invests in a young chain of health clinics and may be looking for another.

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invested $100 million in Carbon Health Inc., a San Francisco-based chain of emergency and primary care clinics, according to a Monday morning announcement. Hours later, Bloomberg News reported that CVS was in negotiations to buy Oak Street Health Inc.
a decade-old chain of clinics serving Medicare recipients, for more than $10 billion.

Listed Oak Street closed the day with a market cap just under $5.5 billion. Oak Street shares rose more than 35% in after-hours trading, while CVS shares were mostly flat. CVS declined comment on the Oak Street report and declined further comment on the Carbon Health investment.

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CVS spent years and billions of dollars expanding from a chain of drug stores into a full-service healthcare company, most notably with the purchase of insurer Aetna in 2018. Late last year, CVS reportedly outbid Inc. AMZN,
and UnitedHealth Group Inc. UNH,
to acquire Signify Health for $8 billion.

CVS was also reportedly interested in One Medical, a chain of primary care clinics, before Amazon agreed to sell its parent company, 1Life Healthcare Inc. ONEM, to take over.
for nearly $4 billion last year. Now it seems to be betting on other similar fledgling health clinic chains.

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Carbon Health is a seven-year-old startup that accepted $100 million in investment from CVS Health Ventures, part of a Series D funding round. The funding was announced just one business day after Chief Executive Eren Bali described more than 200 layoffs at the company. Friday on Twitter that Carbon Health “wrapped major initiatives like public health, RPM, hardware, chronic care programs to focus on our primary primary care and urgent care.”

CVS’s investment in Carbon Health will fund new locations of its U.S. primary and emergency care clinics, Bali said in a press release Monday morning. The company currently has 125 clinics across 13 states, according to the announcement.

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Oak Street is about three years older and slightly larger, with more than 160 health centers in 21 states. The company went public in August 2020 at $21 per share and was worth more than $15 billion at its peak in 2021.

Oak Street shares are down 11.4% in the past 12 months, while CVS shares are down 12.2% and the S&P 500 Index SPX,
has fallen by 16.8%.