Issue 173

Welcome back to E&O Fridays, a paying subscribers-only weekly newsletter focused on the world of digital pharma products and FDA-regulated digital health.

E&O Fridays.

Here’s what’s going on this week in FDA-regulated and pharma-focused digital health…

Finally, there’s a sliver of progress on the Senate’s version of The Access to Prescription Digital Therapeutics bill, which would establish a Medicare benefit category for PDTs. While the House bill has racked up a large group of co-sponsors over the past eight months, the Senate version still had its lone sponsor: Sen. Shelley Capito (R-WV) but no other supporters. Well, this week Sen. Marsha Blackburn (R-TN) signed on as a co-sponsor.
Luminopia quietly secured a new 510(k) clearance a few days ago. The clearance allows its prescription-only, software as a medical device to run on yet another off-the-shelf virtual reality headset: Pico G2 4K. The original de novo for the software cleared it to run on the Samsung Gear VR headset. It took the FDA five months to grant the new clearance to add the Pico device. Luminopia‘s pitch: “Say goodbye to eye patches and eye drops — the future of amblyopia treatment is here. With Luminopia, children can watch TV to improve their vision. Whether it’s Spongebob, Wild Kratts, or Sesame Street, all kids have to do is pick a video, sit back, and watch. Our software algorithms take care of the rest, by presenting the images differently to each eye and stimulating parts of the brain responsible for vision.”
In other FDA news, AliveCor is getting closer to submitting a 12-lead version of its popular smartphone-connected ECG sensing hardware to the FDA. Maybe next year? More in the clinical trials round-up below, but E&O has been tracking the development of that next-gen device since 2021.
CSL Behring expanded its deal with BrightInsight to develop more software as a medical device (SaMD) apps across its portfolio of brands. The companies first started working together in May 2020 when CSL tapped BrightInsight to “develop an app to enhance treatment experiences for adult patients taking Hizentra for two rare diseases, Primary Immune Deficiency (PI) or Chronic Inflammatory Demyelinating Polyneuropathy (CIDP).” The app launched less than six months later.
OK, I’m going to end this section here because the rest of this issue is getting unwieldy…

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Akili Q3: New 14-person sales team, FDA Q-sub on autism, $82K in new EndeavorRx revenue

As noted below, Akili stressed that its sales team was not up and running until the end of the third quarter so consider its growth metrics with that in mind:

Q3 total prescriptions: 1,317
Q3 new prescriptions: 1,072
Q3 refill prescriptions: 245
2022 (Jan-Sep) total Rx: 2,757
Q3 total prescribers: 789
2022 (Jan-Sep) total prescribers: 1,325
Q3 average selling price (excludes patient assistance programs): $111
2022 ASP (excludes patient assistance programs): $152
Q3 revenue: $82,000
2022 (Jan-Sep) revenue: $212,000

No more covered lives reporting: Akili said it decided not to report covered lives anymore as it had trouble sourcing the data and believes it fluctuates too much to be accurate.

The quotes below are from comments that Akili President and COO Matt Franklin made during the company’s first quarterly call with investors this month:

Akili switched from 90-day to 30-day OOP pricing for EndeavorRx

“Looking at pricing, our list price is $450 for a 30-day prescription. Our average selling price in the third quarter, excluding our patient assistance program, was $111, which was similar to the second quarter as we offer patients a self-paid discounted price of $99 for a 30-day prescription. Note that during the course of the year, we did shift from a 90-day prescription with a $295 out-of-pocket cost to the current 30-day prescription with a $99 out-of-pocket cost. Overall, 99 percent of dispensed prescriptions were paid in the third quarter. One percent of the prescriptions went through our patient assistance program, which means they were provided by us at no cost to the patient. In terms of reimbursement in the third quarter, about 4 percent of EndeavorRx prescriptions were reimbursed by insurance companies.”

Akili’s physician detailing strategy is still pharma-like

“Our strategy is to engage with healthcare providers with a direct sales force to increase the volume of prescriptions. In this initial phase of our commercial launch, we focused on key territories prioritized by market opportunity and bounding by geography that enables us to maintain frequent provider interaction. We brought 14 sales reps on board in late Q3 of 2022. They’ve been trained, and they’re now engaging with clinicians in the field. Additionally, we have a small team of inside sales reps to follow up on prescriptions that originate in territories where we do not yet have direct representation. The field sales reps are also supported by our medical science liaisons and an integrated marketing strategy focused on expanding awareness with healthcare providers and caregivers. Our reps are targeting two primary groups of providers, integrated behavioral health centers and pediatricians. Behavioral health centers are multidisciplinary practices that treat a high proportion of complex ADHD cases and tend to adopt innovative treatment approaches more quickly, while pediatricians are responsible for the ongoing management of the majority of pediatric patients with ADHD.”

Akili expects to eventually “target roughly 70 geographic targets across the US” once its full sales team is up and running, but it has positioned this initial launch as an 18-month insights-gathering phase. (So it may be a couple of years before that full launch?)

Akili’s payer strategy is focused on PBMs, commercial insurers, Medicaid plans

“Our strategy is to engage with national PBMs, commercial insurers and state Medicaid plans to establish coverage for EndeavorRx. We now have the market access team focused on each of these stakeholders and while it’s early, we are seeing positive signals from these efforts. In the third quarter, Highmark, the fourth largest Blue Cross Blue Shield organization with more than 6 million members included EndeavorRx in their medical policy for prescription digital therapeutics. We expect leaders like Highmark may influence others to follow in their footsteps.”

Expansion plan hiccups and holdups:

Akili noted it has a CE Mark for EndeavorRx but still no plans to launch in Europe any time soon. Its pivotal trial for using EndeavorRx in an adult population “is progressing slower than anticipated” and the company is “evaluating adjustments that may need to be made to the trial or to the timeline.” Finally, its partner TALi Health, which is working with Akili on a version of EndeavorRx for kids aged 3 to 8, has had a leadership change. So, Akili isn’t sure when the pilot study will kick off and it sounds like the H1 2023 timing the company originally shared is likely not going to happen.

FDA Q-subs on autism, MS, major depressive disorder:

“The final expansion area is in chronic conditions beyond ADHD where we already have clinical data. And I’m happy to confirm that we held our Q-sub meeting with FDA in autism on October 12th. We are also on track for our FDA Q-sub meeting milestones in multiple sclerosis and major depressive disorder.”

Pear Therapeutics lays off another 59 employees, narrows focus to reSET, reSET-O

Here are a few highlights from Pear Therapeutic’s recent quarterly filings and investor Q&A:

Q3 total prescriptions: 11,400+
2022 (Jan-Sep) total prescriptions: 31,000+
Q3 total revenue: $4.08 million
2022 (Jan-Sep) total revenue: $10.13 million
Q3 product revenue: $3.52 million
2022 (Jan-Sept) product revenue: $9.27 million

Pear lays off another 59 people, or 22 percent of its workforce:

“On November 14, 2022, we announced a second reduction in workforce further reducing our headcount by approximately 59 employees, or approximately 22% of our full-time employees as of September 30, 2022, due to the worsening macroeconomic environment.”

Pear laid off 25 employees in July.

Pear is focused on prioritizing the commercialization of just two products now.

Pear CEO Corey McCann told analysts:

“We are deeply prioritizing reSET and reSET-O at the moment… but the opportunity with Somryst remains.”

The fate of the rest of Pear’s pipeline might be another story. While the company has emphasized its near-term focus on its three FDA-cleared products, comments from this recent quarterly call make clear that Somryst is now on the back burner too.

Pear’s deal with one of its creditors requires it to have a minimum trailing 12-month revenue figure of $18 million by the end of December 2022.

As noted above, it’s up to about $9.2 million for the year as of the end of September, which means the company would need to bring in as much revenue in Q4 as it did for the first three quarters combined — with a significantly reduced headcount. The company’s guidance for the year is still between $14 and $16 million. Here’s what Pear’s CFO and COO Chris Guiffre said during the call with investors:

“Today, we are confirming our 2022 revenue guidance of $14 million to $16 million. This guidance assumes roughly 20 percent quarter-over-quarter growth and is expected to come primarily from the sale of reSET and reSET-O to state [Medicaid plans]. Our 2022 revenue guidance is more than three times our revenue guidance in 2021. Today we’re also announcing 2023 revenue guidance, which is $27 million to $37 million.”

Pear expects to raise $40 million in additional financing to hit those numbers.

Cognoa and AppliedVR ask CMS to create new Level II HCPCS codes for their digital products

Pear Therapeutics (Issue 139)and Akili (Issue 168) both previously asked CMS to create individual HCPCS codes for each of their prescription digital therapeutics. Recently AppliedVR and Cognoa made similar attempts.

AppliedVR asked CMS to create a new Level II HCPCS code for its FDA-cleared, prescription digital therapeutic RelieVRx, which uses immersive virtual reality to treat chronic low back pain. Here’s part of AppliedVR’s argument:

“According to the applicant, clinical trial evidence demonstrates that the durable VR hardware is required to deliver significantly greater reductions in pain intensity and pain interference compared to software-only or application-only methods. RelieVRx is self-administered, unsupervised in the patient’s home while the patient is in a seated position. The therapy is not delivered as part of a clinician service. The device is returned upon completion of the 56-day course of treatment and is available for reuse. The device has an expected useful life of 3 years or greater, is suitable for repeated use, and does not include non-medical software or allow nonmedical use. According to the applicant, there are no existing HCPCS Level II codes available for immersive VR for pain or other therapeutic indications used in the home.”

CMS punted on a decision — even a preliminary one — so far:

“In an effort to better understand the request to use a virtual reality device to treat chronic back pain, CMS is interested in additional information or more explanation of how the immersive nature of this device creates an outcome for the patient that would not have the same effect were the software to instead be used on a non-virtual reality device such as a computer, tablet, or phone.” “CMS has no preliminary recommendation with regard to this product as we continue to consider its clinical distinction relative to other products. In the meantime, classification, coverage, and payment for RelieVRx will be made on an individual claim-by-claim basis by the MACs.”

Cognoa also asked CMS to create a new Level II HCPCS code for its prescription digital diagnostic Canvas Dx, which is a diagnostic aid for Autism Spectrum Disorder. Here’s part of the company’s argument:

“The applicant believes a unique HCPCS Level II code to describe Canvas Dx is necessary because most payors have pushed Canvas Dx to be adjudicated under the medical benefit given that any observed healthcare cost offsets for ASD resulting from earlier diagnosis of ASD are typically observed under the medical benefit. Digital diagnostic devices have a different and unique use and cost profile that warrants different coding from therapeutics. Whereas therapeutics are typically prescribed for the ongoing or episodic treatment of chronic conditions, diagnostic digital devices like Canvas Dx are ordered at a singular point in time to aid a health care provider in assessing the presence or absence of a condition. For both private and public payors, the ability to accurately monitor the cost of, and evaluate holistically, each of the two distinct categories of emerging digital solutions will be of critical importance as the digital health field expands exponentially in the coming years. Assessing the cost of a “one and done” digital diagnostic device compared to ongoing spend for digital therapeutics would be extremely challenging under a single digital therapeutic umbrella code.”

CMS’ preliminary recommendation is a bit of a blow to Cognoa:

“Our understanding is that the Canvas Dx would generally be used in a procedure reported with a HCPCS Level I (CPT) code. We have not identified a specific need for this product to be separately paid, since we believe that a particular payer may elect to pay for the service in which this product is used. For instance, Medicare would typically reflect the costs of the product in the payment for the procedure, if it is used, and as such it would not be separately payable.”

Applicants for CPT billing codes for heart-related remote therapeutic monitoring and psychedelic monitoring withdrew but two others got the A-OK

At the American Medical Association’s CPT Editorial Panel meeting last month, a few of the digital therapeutics-related billing codes that E&O had been tracking (as recently as Issue 166) were mostly withdrawn. Both the code for “Cardiovascular Remote Therapeutic Monitoring Services” and one that would have allowed providers to bill for remote therapeutic monitoring or remote physiological monitoring in increments that were less than 16 days — were withdrawn at the last minute. The code for “Cat III – Psychedelic Drug Monitoring Services” was also withdrawn last minute.

Two made it through, however: One of the codes the AMA panel voted to accept:

“Virtual Reality (VR) Facilitated Motor Cognitive Training” will have a new CPT code that goes into effect July 1, 2023: “Accepted addition of add-on code X092T to report motor-cognitive, semi-immersive virtual reality-facilitated gait training.”

The other digital health billing code the AMA greenlit: “AI-Assisted Oncologic Treatment” which will go into effect on July 1, 2023, too: “Accepted addition of code X093T to report patient-specific, assistive, rules-based algorithm for ranking pharmaco-oncologic treatment options; and addition of a new heading in the Category III section (Pharmaco-oncologic Treatment Algorithmic Ranking) with guidelines.”

Clinical trial updates: Click-Otsuka, GAIA, AliveCor, Big Health, Apple, Sway, Pepsi-Gatorade

This is a recurring feature of E&O Fridays that digs into new digital health-related clinical trials as well as updates to others E&O mentioned in previous issues.

Complete: Otsuka and Click Therapeutics’ comparative trial of two digital therapeutics for major depressive disorder (MDD)

No results yet, but Otsuka and Click’s study on two digital therapeutics for MDD is complete. The company had hoped to recruit about 360 but actually managed to bring in 386 participants. Here’s the brief study description:

“This study compares the effectiveness of 2 digital therapeutics in adult subjects diagnosed with MDD who are on antidepressant therapy (ADT) monotherapy for the treatment of depression.”

Now recruiting: GAIA’s RCT on the effectiveness of insomnia digital therapeutic Somnovia

GAIA is now recruiting for a 290-participant clinical trial in Germany that will test the effectiveness of a digital health program developed by the company for people with insomnia. More:

“The trial aims to evaluate the effectiveness of a novel digital health application (Somnovia), which was designed to increase sleep quality in persons with insomnia disorder. Therefore, 290 people with insomnia disorder will be recruited and randomized to two groups: (1) a control group, in which they may engage with any treatment for insomnia disorder and are offered access to Somnovia after a delay of 6 months (i.e., Care-as-Usual [CAU]), or (2) to a treatment group that immediately receives 6-month access to Somnovia and may also use CAU. The primary outcome measure is the score of the Insomnia Severity Index (ISI), collected at three months post-baseline.”

AliveCor sets up trial for 12-lead ECG device in anticipation of a future FDA submission

AliveCor continues to ramp up the lead count on its smartphone-enabled ECG hardware. This new study, which is now recruiting, makes clear a 12-lead ECG device is in the works and possibly headed to the FDA sometime in mid-2023:

“The purpose of this study is to collect clinical validation data to support an FDA submission for a 510(k) for the Kardia 12L hardware which enables the simultaneous diagnostic quality recording of all 6 limb leads and any chest lead. We will be recording both Leads V1 and V2 in a sequential fashion along with the V4 and Limb leads and a simultaneous 12-lead ECG to validate the hardware and a Deep Neural Network model which expands the 5 leads into a complete 12-lead ECG. The 12-lead ECG used for validation of the recordings and the 12-lead synthesis model is the GE Cardiosoft System which is FDA cleared.”

Now recruiting: Big Health and UCSF’s RCT for Sleepio’s clinical effectiveness in treating insomnia

This study focuses on insomnia outcome measures and also notes that Sleepio is an FDA-regulated medical device that is currently not cleared. Another hint that Big is considering an insomnia-focused claim for Sleepio? In addition to or instead of a depression-focused claim?

Meru Health and Curebase set up RCT to test the feasibility, effectiveness and implementability of Meru’s mental health program for depression

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So ends Issue 173 of E&O Fridays. Help me E&O subscribers, you’re my only hope: If you learned something from today’s issue, would you forward this newsletter to someone you think might be interested?

Akili, Pear Q3 results. CPT and HCPCS updates. Trials