Babylon also entered into an agreement with AlbaCore Capital LLP for a secured term loan facility for up to $34.5 million to support the company’s plans to delist.
In the first quarter, Babylon reported total revenue of $311.1 million compared with $266.4 million in Q1 2022, primarily due to an increase in value-based care revenue. It said 60% of its VBC revenue came from its commercial exchange product, Ambetter, which provides virtual access to a primary care provider for patients of select health plans.
Babylon reported a loss of $63.2 million for the period, compared with a loss of $29.1 million in Q1 2022, noting Q1 2022’s total included a $78.8 million gain related to Babylon going public.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $45.8 million, compared with $82.6 million during the same period last year.
THE LARGER TREND
In 2021, Babylon went public through a $4.2 billion special purpose acquisition company (SPAC) merger with Alkuri Global Acquisition. In September, the company said it received notice from the New York Stock Exchange (NYSE) that it was not in compliance with a rule that required companies to maintain an average closing share price of at least $1 over 30 consecutive days.
Two months later, Babylon announced it would proceed with a reverse share split of its Class A ordinary shares, which would trade on a split-adjusted basis when the NYSE opened Dec. 16, with par value of the shares changed to $0.0001 per share. The split aimed to boost its stock price to prevent it from being delisted.
Earlier this year, Ali Parsa, CEO and founder of Babylon, sat down with MobiHealthNews and acknowledged that taking the company public through a SPAC was a mistake.
“We took our stock public in October ’21 through a SPAC, and we had to choose a SPAC for exactly the reason you said – we had 400% growth,” Parsa said. “It cost us a lot to go that way, and, more importantly, it left us with almost no U.S. shareholders. So, you’re in the U.S. New York Stock Exchange with no U.S. shareholder base supporting your stock.”