Trends in Debt Valuations of Private Equity-Backed Dermatology Groups Before and During the COVID-19 Pandemic.

Importance: Private equity (PE) firms have invested in and consolidated dermatology practices. Private equity firms typically operate by conducting leveraged buyouts, which occur when target companies are acquired with capital from PE firms and a combination of debt, which may include debt instruments held in business development corporations (BDCs). Objective: To investigate the valuations of dermatology PE-backed group (DPEG) debt instruments in BDCs' portfolios both before and during the COVID-19 pandemic. Design, Setting, and Participants: This cross-sectional study, conducted from August 1, 2016, to August 31, 2021, examined public financial statements filed by BDCs lending to DPEGs. The public filings of BDCs were searched from inception of the DPEG's debt instrument in a BDC's portfolio, and the amortized cost and fair value of each debt instrument were tabulated. Main Outcomes and Measures: The premium or discount at which each debt instrument was valued at a given time was calculated by dividing the difference between the fair value and the amortized cost by the amortized cost. Different testing methods were conducted for normal or nonnormal data to test differences in debt valuations across all DPEGs between 2 consecutive or nonconsecutive quarters. Results: The search of the public filings found 10 BDCs containing data on 9 unique DPEGs. Overall, there were 15 trackable DPEG debt instruments because multiple BDCs can hold debt instruments for a given DPEG. Data were available from August 2016 through August 2021. During the study time frame, the amortized cost of the loans for an individual DPEG ranged from a low of $1.7 million to a high of $100 million. The valuation of debt instruments was stable for many DPEGs until some were discounted starting in May 2018, with a significant decrease from May 2019 to August 2019 (-1.4%; 95% CI, not applicable; P = .04), prior to the COVID-19 pandemic. Another significant decrease occurred during the pandemic from February to June 2020 (-9.0%; 95% CI, -13.6% to -4.4%; P = .002). US Dermatology Partners decreased to the lowest valuation (Golub BDC, -39.7%; TCG BDC Inc, -48.8%; TCG BDC II, -48.8%) of the DPEGs examined in November 2020 even after receiving a $10 million forgivable Small Business Administration Paycheck Protection Program loan in May 2020. After pharmaceutical companies announced effective COVID-19 vaccine candidates in November 2020, there was a modest and significant improvement in debt valuations (2.3%; 95% CI, 0.2%-0.4%; P = .03); however, they remained discounted. Only PhyNet Dermatology's debt instruments improved to a premium valuation by August 2021. Conclusions and Relevance: Debt valuations of some DPEGs found in this cross-sectional study suggest a lower probability that their loans will be repaid in full. This could be a signal that some DPEGs are not performing well financially.

Developing Treatment Guidelines During a Pandemic Health Crisis: Lessons Learned From COVID-19.

The development of the National Institutes of Health (NIH) COVID-19 Treatment Guidelines began in March 2020 in response to a request from the White House Coronavirus Task Force. Within 4 days of the request, the NIH COVID-19 Treatment Guidelines Panel was established and the first meeting took place (virtually-as did subsequent meetings). The Panel comprises 57 individuals representing 6 governmental agencies, 11 professional societies, and 33 medical centers, plus 2 community members, who have worked together to create and frequently update the guidelines on the basis of evidence from the most recent clinical studies available. The initial version of the guidelines was completed within 2 weeks and posted online on 21 April 2020. Initially, sparse evidence was available to guide COVID-19 treatment recommendations. However, treatment data rapidly accrued based on results from clinical studies that used various study designs and evaluated different therapeutic agents and approaches. Data have continued to evolve at a rapid pace, leading to 24 revisions and updates of the guidelines in the first year. This process has provided important lessons for responding to an unprecedented public health emergency: Providers and stakeholders are eager to access credible, current treatment guidelines; governmental agencies, professional societies, and health care leaders can work together effectively and expeditiously; panelists from various disciplines, including biostatistics, are important for quickly developing well-informed recommendations; well-powered randomized clinical trials continue to provide the most compelling evidence to guide treatment recommendations; treatment recommendations need to be developed in a confidential setting free from external pressures; development of a user-friendly, web-based format for communicating with health care providers requires substantial administrative support; and frequent updates are necessary as clinical evidence rapidly emerges.