Flatiron Health Files for IPO: Pioneering Oncology Data Platform OncologyCloud™ Poised for Public Debut

Part 1 of the Series: The 30 Most Notable Healthcare Startups to Watch in 2015MetaMed: Unlocking a New World of Personalized Medicine for Patients

VCBeat previously introduced the 30 most undervalued healthcare startups worth watching in 2015 (Click here for details.), VCBeat will continue to monitor the developments of these 30 companies and bring you the latest detailed reports on them. Today marks the second installment of the series “30 Most Notable Healthcare Startups to Watch in 2015”: Flatiron Health, a big data analytics platform for oncology.

As is well known, for a long period of time, the term “cancer” was virtually synonymous with “terminal illness.” So, what could two young men with no medical background—Nat Turner and Zach Weinberg—possibly do about this intractable problem that has eluded so many scientists and specialist physicians? The answer lies in big data analytics.

Now, how to better leverage data has become an issue that many healthcare institutions increasingly need to prioritize. Big data has ushered the entire healthcare industry into a new era characterized by greater speed and intelligence. (For details, please refer to “With a Bang: Healthcare Enters the Era of Data Analytics”) However, in the field of oncology, this revolution has yet to arrive.

Simply put, the main issues exist on two levels: data collection and data analysis.

First is data collection. Currently, most clinical data on cancer are recorded in the notes and reports of medical personnel and have not been effectively utilized. Traditional population health data analysis is based on insurance claims data. Although this approach allows for the rapid accumulation of large volumes of data, it lacks the necessary depth for complex diseases such as cancer. Therefore, analyzing cancer solely using insurance claims data is akin to assessing an entire iceberg by looking only at its tip above water.

Data obtained from clinical trials are the most valuable for cancer research; however, in the United States, only 4% of the more than 13 million cancer patients participate in clinical trials. Consequently, healthcare professionals are unable to gain further useful insights from the remaining 96% of patients.

Although the existence of electronic health records (EHRs) can simplify data collection and integration to some extent, EHRs lack unified standards, resulting in highly disorganized and difficult-to-utilize data records that contain a significant amount of irrelevant information. In the words of Zach Weinberg, when it comes to the collection of specialized oncology data, “electronic health records are terrible.”

When it comes to data analytics, Nat Turner and Zach Weinberg discovered, after engaging with numerous oncologists and cancer treatment centers, that standard big data analytics methods cannot be directly applied to oncology data. Instead, significant time must be invested in developing specialized data analytics models tailored specifically for cancer care—a field that remains largely unexplored.

Nat Turner and Zach Weinberg conducted extensive analysis and investigation into the potential and business models of big data analytics in oncology. They consulted numerous cancer specialists, visited more than 60 cancer treatment centers, and engaged in in-depth discussions with them. In 2012, they founded Flatiron Health, aiming to aggregate global oncology data and leverage big data analytics to transform these data into actionable information, thereby better supporting physicians, patients, and relevant researchers.

How Flatiron Health Does It

Flatiron Health is not the first company founded by Nat Turner and Zach Weinberg. During their college years, they ventured into online food delivery services and also established an advertising agency. Their company, Invite Media, was acquired by Google in 2010 for over $80 million. This time, they have turned their attention to the burgeoning healthcare sector, specifically tackling a persistent challenge that the medical community has long struggled to overcome—cancer.

Flatiron Health produced the following video to explain their ideas.

Flatiron Health Overview video

Flatiron Health has established OncologyCloud™, a cloud-based data storage and analytics platform specifically designed for oncology. This platform not only extracts information on cancer patients from electronic medical records (EMRs) but also categorizes and integrates disparate data to identify valuable insights. Furthermore, it incorporates “unstructured” data held by experts and clinicians, significantly enhancing both the diversity and accuracy of oncology-related data.

To address the specific requirements of big data analysis in oncology, Flatiron Health spent two years building a cloud-based platform model dedicated to cancer data analysis. This analytical model enables targeted big data analysis for different types of cancer.

As it turned out, the efforts of Nat Turner and Zach Weinberg once again won recognition from investors. To date, Flatiron Health has cumulatively secured over $140 million in investment, including a $130 million Series B round led by Google Ventures in May 2014. This marked Google Ventures’ fourth-largest single investment to date and its largest investment in the healthcare software sector.

Josh Kopelman of First Round Capital, a participating investor, stated that Flatiron Health’s pursuit of a solution to a long-standing challenge in cancer treatment is highly compelling, noting that few teams have conceived such an approach. This represents nothing short of a seismic shift for data-driven healthcare.

Alan Louie of IDC believes that with the same issue, applying big data analytics can lead to significantly different outcomes. Whether one possesses data is one matter; being able to effectively integrate and analyze that data is another.

In fact, many large cancer treatment centers, such as Sloan Kettering and Mt. Sinai’s Icahn Institute, have also attempted to develop such cloud-based platforms for oncology data analysis. These institutions aim to conduct more specialized analyses of the data they possess. Currently, Flatiron’s OncologyCloud™ not only enables the analysis of data from a single institution but also integrates all data within its database to derive actionable analytical insights.

IPO Expectations and Strategic Cooperation

Shortly after Flatiron Health secured a substantial investment from Google, the prominent U.S. digital health incubator Rock Health released a survey in May 2014 forecasting which digital health company would be the next to go public. Rock Health polled 100 investors and compiled the following list, which included Flatiron Health, albeit with only 3% of the votes.

Flatiron Health understands that it is difficult to achieve breakthrough growth by relying solely on its own efforts. To ultimately meet the expectations of an IPO, it must integrate resources, expand boundaries, and increase value.

First, Flatiron Health swiftly acquired Altos Solution, a provider of electronic health record (EHR) services for oncology. The company’s EHR system, OncoEMR, offers specialized electronic health record services for cancer patients. Flatiron Health will integrate the OncoEMR and OncologyCloud™ platforms to facilitate the specialized and standardized collection of oncology data.

To attract professionals in the oncology field and address the founding team’s lack of medical background, Flatiron Health persuaded Amy Abernethy to join as Chief Medical Officer in July 2014. Dr. Abernethy is a renowned oncologist and a professor of medicine at Duke University, where she previously led the Duke Cancer Care Research Program. The company subsequently recruited community oncology experts Dr. Robert J. Green and Tesh Khullar.

In December 2014, Flatiron Health and Foundation Medicine, another personalized medicine company backed by Google, announced a strategic partnership to jointly develop an information data cloud platform. This platform would incorporate more genomic and clinical treatment outcome data to advance the development of targeted therapies for cancer patients.

This collaboration will integrate Flatiron Health’s OncologyCloud™ oncology data cloud platform with Foundation Medicine’s comprehensive genomic profiling capabilities, providing stronger data support for the development of targeted cancer therapies and facilitating the creation of new targeted treatments for cancer patients.

In the same month, Flatiron Health announced a collaboration with Vector Oncology to enable oncology professionals to collect and access cancer patient data during treatment, leveraging Vector Oncology’s Patient Care Monitor and its oncology data cloud platform.

Meanwhile, Flatiron Health’s collaboration with the National Comprehensive Cancer Network (NCCN) to launch a new database of oncology clinical outcomes will provide more robust data and technical support for cancer researchers’ studies and physicians’ treatment of cancer.

Currently, Flatiron Health’s OncologyCloud™ serves nearly 2,000 clinician clients across more than 200 oncology practices. In the current market, Flatiron Health has virtually no direct competitors, particularly in the niche of specialized oncology data analytics; the closest comparable platform is the American Society of Clinical Oncology’s CancerLinQ. As co-founder Zach Weinberg put it, perhaps the only true competitor is Microsoft Excel.

The story of Nat Turner and Zach Weinberg continues, as does Flatiron Health’s ongoing effort to tackle the challenges of cancer.