Babylon has said that it requires ‘significant cash’ ahead of its impending listing on the US stock exchange.
The private healthcare provider, which runs the largest NHS GP practice in England through its digital-first provider GP at Hand, is pursuing a merger that will mean it will become publicly listed on the New York Stock Exchange.
Babylon said this week that it expects the merger with publicly traded special purpose acquisition company (spac) Alkuri Global Acquisition Corp to complete ‘shortly after’ a shareholder meeting that took place yesterday.
But a registration statement filed with the US Securities and Exchange Commission ahead of the merger, dated 30 September, said that it requires ‘significant cash resources’.
It said: ‘We require and will continue to need significant cash resources to, among other things, fund our working capital requirements, increase our headcount, make capital expenditures (including those related to product development), and expand our business through acquisitions.’
It added that if the merger does not take place, the company will need to ‘seek additional funding’ to ‘continue [its] operations’.
The document said: ‘There are material uncertainties (ability to fundraise further capital in the short term) related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern and therefore, to continue realising its assets and discharging its liabilities in the normal course of business.’
Due to a delay of ‘several months’ with the merger, Babylon was forced to take out a $15m loan to ‘address short-term cash flow needs’, it said.
The document added that Babylon made a loss of $75.8m in the six months up to 30 June 2021, leaving the company’s ‘cash and case equivalents’ totalling $42.4m as of 30 June.
In 2020 as a whole, Babylon reported a net loss of $188m, after losing $140.3m in 2019, it added.
Babylon announced earlier this month that it had secured a conditional investment of up to $200m to ‘fuel’ its ‘rapid growth plan’, meaning it will have access to ‘as much as $775 million of capital before fees’ following the planned merger.
Meanwhile, Babylon also announced this week that it will manage 55,000 new patients through its partnership with the Royal Wolverhampton NHS Trust alongside the 105,000 on its GP at Hand list.
Babylon founder and CEO Ali Parsa said: ‘This expansion of our work will help Babylon further our aim of reaching communities where access and affordability are obstacles, in order to make health equity the norm.
‘Our growth in value-based care further demonstrates the structural advantage of our digital-first model, which is scaling ahead of plan, all while maintaining high-quality healthcare.’
It comes as NHS England and the Government have set out a £250m ‘support’ package for GPs that sets out a range of measures to improve access to practices.
Babylon’s NHS arm GP at Hand became the first practice in England to register more than 100,000 patients on a single list in August.
Concerns have previously been raised around the safety Babylon’s digital GP offer, including by a doctor who was labelled a ‘troll’ by Babylon after he tested its AI app and reported the results on social media.
The provider has been accused by critics of ‘cherry-picking’ younger, healthier patients, leaving other practices to care for patients with greater needs.
GP at Hand controversially enjoyed the endorsement of then-health secretary Matt Hancock when it launched in 2018.
Upon complaints from GPs, including the RCGP, Mr Hancock said it did not differ to other GP practices who are also ‘private’.
Meanwhile, Pulse revealed in June that NHSX and NHS England were considering the viability of a wider roll out of an artificial intelligence triage model based on that used by Babylon.