Issue 042. Get E&O weekly. | Subscribe

Digital health research from Brian Dolan.

Welcome to E&O.

Last week’s newsletter had a 59 percent open rate. Here’s what’s happening this week:

• HIMSS 2020, the biggest annual conference focused on health IT, is canceled because of the COVID-19 pandemic. HIMSS bought my first company, MobiHealthNews, and I still know a lot of the people there. They made the right call, but I do worry about how this impacts the future of the organization. (The big event drives almost everything at HIMSS.) Here’s hoping for the best.
• Besides the above, going to try to avoid writing about COVID-19 for now. Safe to assume you all are already overwhelmed. (Apologies in advance for this week’s bubonic plague doctor GIF below.)
• Voluntis announced another oncology DTx deal, this time with Bristol-Myers Squibb. It also announced plans to dial back its diabetes business in the US, which is likely driven in part by Sanofi’s announcement to do the same. There’s a lot more here about Voluntis’ roadmap.
• Surprised to happen upon a promotional brochure, or “leave behind”, for Zimmer Biomet’s mymobility offering. Zimmer is currently conducting a clinical trial with Apple for mymobility, which uses an Apple Watch and app to help patients before and after a knee or hip replacement surgery. The last study participants are expected to finish up the trial in December 2020. Here’s the brochure.
• Swedish biopharma Orexo submitted its digital therapeutic for “bothersome or harmful alcohol consumption including diagnosed alcohol use disorder (AUD)” to the FDA for clearance. It hopes to have it commercially available in the US during the second half of the year. Its DTx partner, GAIA, already markets the therapeutic in Germany and Switzerland.
• What’s next for Better Therapeutics: It plans to conduct an “open-label, multi-site, randomized, controlled, parallel-group trial” of its Type 2 diabetes digital therapeutic. The results from the trial will form the basis of its submission to the FDA. Better just released some results from a small study of the DTx.
• Hims has brought in $100 million in total revenue since launching two years ago. This Modern Retail interview with the CEO is worth a read if you’re tracking their growth.
• Similarly, this analysis over at Scale Fanatics digs into how Calm has built its marketing engine to become one of the highest revenue-generating iPhone apps on the market today. It gets into some nitty-gritty tactics but nothing groundbreaking: Facebook ads and retargeting are core to the strategy.
• Verily inked a research partnership with London-based medtech company LivaNova to conduct a trial that uses Vagus Nerve Stimulation (VNS) therapy for Difficult to Treat Depression (DTD). Participants in the trial will wear a Verily Study Watch and have a Verily app on their phone.
• Two interesting acquisitions in recent days: First, Ginger, a mental health-focused digital provider acquired the underlying technology of its competitor, LiveBetter. LiveBetter offered its services for free to end-users, and, despite acquiring its tech assets, Ginger granted LiveBetter a perpetual license to keep using them (as a restructured non-profit) to continue offering free services to the underserved.
• Second: ACO Caravan Health has acquired Seattle-based Wellpepper, which tried to use apps and other tech to help patients better understand their treatment plans.
• Finally, busy week for digital health thought leadership from the big consulting firms: Bain has a simple chart that shows biopharma’s are doing more deals (M&A and investments) in DTx and disease management than other digital-related areas.
• BCG has a short piece out on digital therapeutics that claims Omada (like Noom) has made $250 million in revenue, which seems way off. It also said Omada was a unicorn, which I think is also untrue. Noom says it made about $237 million in revenues in 2019, and my (admittedly, very simple) calculations in the Omada report put it closer to $70 million (or less) that year. I asked the authors if it was a typo… (Update: It was a typo, and they removed it.)
• Lastly, PwC published a short piece about how biopharma should approach the digital therapeutic opportunity. Most curious suggestion to me: Biopharma should see DTx as an opportunity to expand beyond priority therapeutic areas.

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Livongo in 2019: 2x members, 2.5x revenues, and improved enrollment rate

Now that the year-end 2019 results are in, it’s clear that Livongo has continued to grow at an impressive clip. Here are the highlights:

Revenues increased 148 percent year-over-year: Livongo brought in $169.9 million in revenue during 2019, which marked an increase of 148 percent over its 2018 revenue figure: $68.4 million.

Livongo ended 2019 with 804 clients and started 2020 with a lot of launches: In the first two months of 2019, Livongo has already launched “a record number” of clients with 424 already launched, up over the 231 it launched during Q1 of 2019. This year’s figure will grow as the quarter still has a few more weeks.

Livongo added more Fortune 500s: The company said it now has 30 percent of the Fortune 500 as customers as opposed to 20 percent during 2018.

Livongo added nine new health plan clients: The company said that includes a number of new additions on the fully-insured side.

Diabetes members nearly doubled: Year-over-year, Livongo almost doubled the number of people in its diabetes management program. At the end of 2019, it had 223,000 participants, up from 114,000 at the end of 2018. It had 53,000 at the end of 2017.

Hypertension and prediabetes membership is growing: Livongo announced that it now has 48,000 members across its hypertension, prediabetes and weight loss programs. The company also noted that the estimated value of all the new agreements it signed with customers in the fourth quarter was $77 million, and 35 percent of that (or $27 million) is for Livongo’s programs for hypertension, prediabetes and weight management, or behavioral health.

Average enrollment rate eked up one percentage point in 2019 vs. 2018: The company said its enrollment rate hit 35 percent in 2019. That’s one percentage point higher than its average enrollment rate for clients who launched in 2018.

Livongo predicts $280 million to $290 million in 2020 revenue, profitability in 2021: The company expects revenue to grow at less than 100 percent year-over-year for 2020. It expects to lose between $20 million and $22 million in adjusted EBIDTA for the year, but aims to be profitable in 2021. It also noted that its “preferred” status on the Express Scripts Digital Health Formularly will only start driving revenue this year, in 2020.

I’m surprised that the company has yet to acquire any additional startups that it could bolt onto its existing portfolio of services, but its impressive growth is, perhaps, answer enough that, so far at least, the company hasn’t needed acquisitions to grow. At this point, I’d be more surprised if Livongo doesn’t snap up one of the smaller MSK digital therapeutics companies by months end. It also still needs to a COPD/asthma program.

RCT shows Lark’s hypertension AI app drives similar outcomes to Omron’s simple BP tracker

You probably haven’t heard about this study, because the results aren’t great: This week JAMA published the results of a randomized control trial that aimed to figure out what kind of impact Lark’s automated coaching program had on people with uncontrolled hypertension. The Clinicaltrials.gov entry for the study is here.

A team of researchers conducted the trial with Lark’s partner, Omron, which also funded the work and provided the connected blood pressure cuffs used in the trial.

The RCT included 297 participants who completed the trial. They were randomized to either receive Lark’s hypertension coaching app or a blood pressure tracking app. Those that received Lark’s coaching app were not found to have lower blood pressure at six months than the control group. Ultimately, the researchers concluded that the study was not large enough to “detect small but potentially important intervention effects.”

The control group used an app that basically just received the blood pressure readings from the Omron device and provided no feedback or coaching. Lark’s app was much more feature-rich. Here’s how the researchers described some of its functionality:

It also prompts users to contact a provider if a reading is out of range. The feature list is pretty long. If you want more detail, the study’s results are published in JAMA’s open-access journal.

The final results of the RCT showed a drop in SBP of about 5.9 percent within the intervention group, which included 144 participants in the end. That’s something, but the control group of 153 participants, who just used Omron’s basic blood pressure tracking app, showed a decrease in SBP of about 4.8 percent, too. The researchers wrote: “The observed difference in the primary outcome by study groups is consistent with no effect, or with a treatment effect that was smaller than what the study was powered to detect.”

One curious thing about this study, however, is that Lark shared preliminary results from the study (as of April 2018) while the study was still underway. The company published a recap of preliminary results with a headline up top that read: “Health plans called on Lark to show how to improve hypertension management at scale. Lark delivered.” They said the study showed a drop of 13.35 percent in systolic blood pressure among 150 participants using Lark’s app.

This PDF of the results has since been deleted from Lark’s site along with an archived version of a webinar that apparently discussed them too, but after signing up for it, I can’t seem to get it to play. A different readout of results from an undisclosed study that included 76 participants is available on the Lark site here. (Given it was published in September 2019, this may be an analysis of a subgroup from the RCT, but that’s not clear from the text.)

Following these results, I’m curious to see whether Omron pushes ahead with a partnership with Lark, or just sticks with its own simple tracking app.

Arrivals and Departures: Novartis, Alivecor, Zoom+, Cognoa, and more

Novartis saw a few people leave its digital medicines business unit in recent months.

Earlier this year the biopharma saw the departure of Betul Susamis Unaran, its Global Head of Digital Medicines. She’s now at healthcare ecommerce company Zur Rose Group. On Linkedin, Unaran described her role at Novartis, which she held for two years, as “leading the digital agenda and team” of Novartis Pharma and “driving the efforts to ‘reimagine medicine with data and digital’”. Unaran’s purview included digital innovation along the customer journey, like around-the-pill, beyond-the-pill, and digital therapeutics. The five therapeutic areas her work focused on included: “Cardio-Metabolic, Respiratory, Neuroscience, Ophthalmology, IHD (Immunology, Hepatology, Dermatology).”

Last month a longtime Novartis employee, who had been with the biopharma since 2003, left to join Microsoft‘s health division. Andrew Warrington was a project leader at Novartis for its digital therapeutics domain. He spent the past two years on DTx for oncology and cardio-metabolic conditions: “Led two drug/digital combination projects — one preclinical in Oncology and one preparing for clinical in Cardio-Metabolic.” Warrington led the teams from drug development through market access and commercial.

The De-Googlification and Amazonification of Alivecor continues: Alivecor named a former Amazon executive as its new CTO: Siva Somayajula. The company named former Amazon exec Priya Abani as its new CEO in July. She replaced former Googler Vic Gundotra. As other Xooglers depart the company, it seems natural that more former Amazon employees join.

Mike Payne, an early Chief Commercial Officer and Head of Medical Affairs at Omada who went onto Virta Health and Ancestry in similar roles, has joined Zoom+Care. Zoom+ is a digital-savvy retail clinic chain in the Pacific Northwest that mostly focuses on Millennials.

The former president of the American Academy of Pediatrics, Dr. Colleen Kraft, has joined Cognoa as the senior medical director of clinical adoption.

Michael Evers, the CEO of The Learning Corp, makers of Constant Therapy, has left the company. Back in 2017, Digital Health Corp., a holding company that also includes Reflexion, acquired Learning Corp. Evers took the helm at The Learning Company about a year after its acquisition.

Life sciences manager at Deloitte UK, Carmen Jack, has joined London-based digital therapeutics company Medopad.

Quick links to E&O research reports

The links below aim to make it easier for paying subscribers to find the long-form research reports on the E&O site:

The Digital Health Enrollment Report (Subscribers-only Link)
The Omada Health Report (Subscribers-only Link)
The Google Health Report (Subscribers-only Link)
The Pear Therapeutics Report (Subscribers-only Link)
The AliveCor Report (Subscribers-only Link)
Apple’s Healthcare Work Experience (Subscribers-only Link)
Approximating Livongo’s S-1 (Subscribers-only Link)

That’s a wrap on Issue 042 of Exits & Outcomes. Catch you next week!