6.05.20
7 min. read

Thanks to Apple, Alivecor goes more DTC. Part II: Software as a drug.

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Issue 055.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week I wrote up how Welldoc became the first company to get its digital therapy a billing code like a drug. Next week I am open to ideas -- what should E&O dig into? Here's what's happening this week:

  • Meant to include this last week: In Issue 053 I wrote about an RCT focused on a coach-led intervention for depression and anxiety. Small detail, but I missed a step in the IP licensing daisy-chain. Here's how it should have read: "A startup called Actualize Therapy has licensed the intervention for commercialization from the researchers, who incorporated as Adaptive Health." I originally thought Adaptive was the licensee and not the licensor.
  • Striiv, which at one point tried to compete with Fitbit in the early fitness wearable market, looks to be going under finally. Its founding CEO
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5.29.20
6 min. read

Part 1: How one digital therapy got an NDC, and why it will be the last.

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Issue 054.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week I shared new financial details surrounding three recent M&A deals. Next week I'll write Part II of how a piece of software gets coded like a drug. Here's what's happening this week:

  • After a presentation on digital health business models to 100+ health startups in Finland, Sweden, and Iceland, I spent the rest of this week trying to wrap my head around NDC vs UDI coding. Read Part I: How Welldoc got an NDC code -- after the jump.
  • One of the newer prescription digital therapeutics companies I've been tracking (Issue 035) is IBS-focused Mahana Therapeutics. A new Medium post from the company reveals that Mahana's first product will be named Parallel: "Together, we’ve made major strides in a short amount of time. This includes the development of Parallel, Mahana’s first product,
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5.22.20
6 min. read

M&A: Omada-Physera. Optum-AbleTo. Elekta-Kaiku.

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Issue 053.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week I wrote about a Senate bill that seeks reimbursement for prescription digital therapeutics. Next week I'm hoping to get wonky about how a piece of software gets coded like a drug. Here's what's happening this week:

  • Unusual way to kick off Year Two of E&O: After I suggested that Omada should (and probably would) acquire digital MSK provider Physera last weekend in a rare open-access post on E&O, a few days later Omada did just that. So... welcome to all the new readers, and please ratchet your expectations way, way down.
  • Big Health wrote a white paper on the cost-effectiveness of its Sleepio product earlier this month:

"The study assessed baseline healthcare costs for 1,102 employees (551 Sleepio users and 551 controls) during an initial 12-month timeframe, before Sleepio was

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5 min. read
5.16.20

Why Omada Health should buy Physera and other MSK M&A digital health predictions

As I wrote in Issue 052, Hinge CEO and co-founder Daniel Perez predicted that during the coronavirus pandemic:

“Health plans and employers want a trusted solution in times of uncertainty. My prediction (from the eye of the storm) is that over the next six months we’re going to see the most trusted solutions (Livongo, Hinge Health, Teladoc) continue to outperform their peers, and gain even more market share.”

I was impressed by his sleight-of-hand — sandwiching his startup in between two of the only publicly traded digital health companies! — but it did get me thinking a bit more about Hinge’s competition.

There’s a strong likelihood that by the end of 2020, Hinge’s main competitors will be Livongo and Omada Health.

Here’s how I think consolidation in the MSK digital health space could play out.

Digital health MSK M&A will ramp up in 2020

No doubt, Hinge Health is the current market leader in digital health-enabled MSK programs. As one investor put it in E&O’s Hinge Health Report, the company has “sucked up all the air” in the space following its $90 million round. Around the same time, it also crossed more than 100 employer customers.

While Express Scripts did not include any MSK offerings in its high-profile Digital Health Formulary launch, another PBM, CVS, included Hinge Health in its somewhat similar endeavor, which it now calls CVS Caremark’s “Point Solutions Management”. (Brutal branding.) The proliferation of MSK startups, Hinge’s growth, and the PBM’s recognition of the category all point to this being MSK’s digital health moment. It’s the “next box to tick” for many self-insured employers who already have prediabetes, diabetes, and behavioral health programs in place.

So, it’s a safe bet that Livongo and Omada are going to make a move in MSK soon.

Why Omada Health will acquire Physera

Omada Health will make the first move by acquiring Physera, an MSK-focused startup with a long list of important similarities to Omada. Update May 19, 2020: Omada acquired Physera.

For a few years, Physera was typically mentioned in the same breath as Hinge as the two market leaders, but the companies have taken markedly different approaches to growth. While Physera has focused on clinical depth by, for example, connecting patients remotely with real live medical professionals before starting the program, Hinge has focused more on scalability (health coaches instead of medical professionals) and it has a broader approach than remote physical therapy.

The contrast reminds me of Omada vs. Livongo.

Here’s how Physera’s Director of Clinical Services Todd Norwood described the first step in the company’s program in a recent blog post:

“When a patient meets with a physical therapist (PT), the first step is a diagnosis, which is about 80 percent subjective (based on conversations). Video allows PTs to maintain eye contact while using tech tools to ensure the right questions are asked during the consultation. The remaining 20 percent is objective, which requires hands-on tests; however, the majority of hands-on testing can be done remotely. In the instance (~5 percent) a patient can’t be diagnosed virtually, Physera PTs are trained to refer to the proper next step.”

Like Omada, Physera has set up a separate healthcare provider entity called Physera Physical Therapy Group, PC. Physera contracts with this nationwide network of licensed PTs and doctors of PT who are able to diagnose, triage, and make adjustments to a patient’s individual care over time. Physera stresses “patient safety” in its marketing materials, and it believes people with MSK pain should at least have a remote meeting with a medical professional before starting a program — in case the pain is actually a symptom of something much more serious.

Image: Physera’s iOS App

Physera’s CEO and Co-founder Dan Rubinstein told me in a recent interview:

“Our approach is a clinical program that supercharges clinicians. We take the parts of physical therapy that work well and fix the parts that are broken… we take a high integrity approach to how we set this up. We look at broad populations. We make our program available to anyone who is experiencing pain, whether it is early, acute, or chronic pain. If it is pre-surgical pain, we can help you be preventive or help you recover if you have already had surgery.”

Again, this holistic, provider-like approach is very similar to Omada’s. Rubinstein shared a little about how he thought about enabling technology when he first started Physera:

“I got interested in healthcare because I wanted to bring the predictive modeling and closed-loop modeling — that companies like Google and Facebook use to deliver personalized user experiences — to healthcare. How do we use data and technology to inform diagnostics, care pathways, and treatment? You can either start from: ‘I am going to build the smartest robot and try to make it as smart as a human,’ or ‘I’m going to take the humans and get them technology to make them more efficient and more effective.’ I think it does cause you to go down different paths, and I don’t know that you necessarily converge in the same place. I think for something as important as healthcare… you do need a human being, because they can do things that a machine can’t do — particularly in life and death situations.”

In addition to aligned business models and approaches to technology, Omada and Physera have leadership teams with similar backgrounds. Both Omada and Physera are helmed by ex-Googlers. Both companies have been able to recruit former Obama Administration HHS officials to their C-suites or advisory boards. That’s just what’s visible from the outside, but it seems likely there is a lot of cultural alignment to drive a successful merger post-acquisition.

Livongo will probably acquire a small MSK digital health startup

The very first longform research report that I wrote for E&O was an approximation of Livongo’s S-1 filing, which it ended up filing a few weeks after my report. In my writeup, I predicted that Livongo would go on an acquisition spree after its IPO to bolt on additional verticals. To my surprise, Livongo has not acquired a single company in its first year of being public. A year ago I wrote that:

  • Asthma/COPD was Livongo’s most likely first target. Cohero Health seemed to fit the bill.
  • MSK was the area I predicted Livongo would move into second. I figured Hinge Health was the best option, but that was long before Hinge raised its $90 million round.

Livongo’s modus operandi is to acquire smaller companies (See: Diabeto, Retrofit, myStrength). Given the number of digital health startups working in MSK right now, that’s a lot of options.

I have no idea how well SimpleTherapy is doing, but it shares a marqee customer with Livongo: Costco. If a small acquisition like this is less about adding new customers and more about selling into existing ones, I could see how Livongo would be interested in an MSK company that has proved itself to one of Livongo’s own big customers.

Once Livongo and Omada enter MSK, what does Hinge do?

One big question for me is how this all shakes out for Hinge Health. Once it is competing with more entrenched companies like Omada and Livongo, Hinge will likely need to diversify the same way they have. Can Hinge really compete with either of those companies in prediabetes, diabetes, or behavioral health? Would it be smarter to add programs for conditions that are still underserved but likely next on payers’ checklists?

Hinge’s $90 million raise will keep just about any potential acquirer away for now. As Livongo and Omada add MSK, I wonder if Hinge can get to an IPO in two years without at least posturing about its plans to diversify first.

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5.15.20
6 min. read

Senate bill seeks Rx digital therapeutic Medicare reimbursement.

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This digital health research is for paying Exits & Outcomes subscribers only. Subscribe now to read this article, get the weekly newsletter, and receive unrestricted access to past and future research from the Exits & Outcomes archives. Smash the link above or below to subscribe yourself -- or head over to our pricing page to subscribe your team or your whole company!

Issue 052.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week's newsletter had a 56 percent open rate. Here's what's happening this week:

  • Wow -- this is Issue 052. That means: It's been a whole year since Exits & Outcomes published its first edition! Thanks to all of you for the support. I'm putting together webinar/briefing to recap of the first year of E&O -- stay tuned for a registration link next week.
  • Nikhil Krishnan's Out of Pocket newsletter is well worth a read and a subscription (free for now). This past week he covered the trappings of selling to self-insured employers. (I planned to link to this post -- which I knew was in the works -- and then he went ahead and linked to E&O's Enrollment Report in it. Makes this seem like a self-serving gesture, but I really was going to link to it anyway! It's good... and funny.)
  • Serial
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5.08.20
9 min. read

Novartis-Propeller near commercial launch. 5 biz models for MSK.

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Issue 051.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week's newsletter had a 55 percent open rate. Here's what's happening this week:

  • Starting to see some smart takes on how the pandemic will change healthcare and digital health. If you haven't read these yet, dig in to John Moore's Chilmark Research site and this one (from a few weeks ago) over at Lisa Suennen's VentureValkyrie blog.
  • Seems like each week there is an update on Roche's VR digital therapeutic for autism. The company announced it was partnering with Harman, a division of Samsung, to build the technology components of the offering. They hint it may lead to digital products for other conditions, too.
  • CSL Behring, a large biotech company focused on rare diseases like hemophilia, von Willebrand disease (VWD), primary immunodeficiency (PID), hereditary angioedema (HAE),
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5.01.20
6 min. read

Roche VR autism DTx. Pear pre-FDA launch. Welldoc reunion.

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Issue 050.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week's newsletter had a 58 percent open rate. Here's what's happening this week:

  • I received some great responses to last week's The Hinge Health Report, so I'll have some more on the digital MSK market in next week's newsletter.
  • Speaking of MSK, the latest COVID--19-related regulatory rollback from CMS allows physical therapists and others to bill Medicare for services rendered via telehealth. More here.
  • Meanwhile, HHS's Secretary's Advisory Committee on Human Research Protections (SACHRP) suggested more regulations are needed for requirements around using digital health technologies in medical research. Dig in here.
  • Representatives Diana DeGette (D-CO) and Fred Upton (R-MI) offered up a paper on what a Cures 2.0 Act might cover. Notably, their working paper mentions "digital
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17 min. read
4.24.20

The Hinge Health Report

In this article:

Hinge Health is a fast-growing, digital health company focused on musculoskeletal (MSK) chronic conditions. E&O has put together this 4,400-word report, including year-over-year growth in participants, estimates for annual revenue figures going back to 2017, which conditions the company could target next, and much, much more.

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It's a good one, too.
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It all started, improbably, with marbles. Virtual ones.

In October 2012, a group of graduate students in London, including an American ex-pat named Daniel Perez and German national named Gabriel Mecklenburg, launched Marblar. The platform attempted to help governments R&D shops and other inventors find entrepreneurs willing to license their old, unused patents. Here's how TechCrunch described it at the time:

"The authors of un-commercialised discoveries work with the Marblar team to post a listing of their invention — distilled in an accessible, yet comprehensive form — from which the crowd are tasked with drilling further into its capabilities and, in contest form, enter ideas for possible commercial uses. Each ‘entry’ is then voted upon by the Marblar community, while there’s a wiki-like Q&A section so that users can interact with and bounce ideas off of the invention’s

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3 min. read

Akili launches pre-FDA. Korea OKs Samsung BP app.

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Issue 049.

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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:

I've been heads-down on The 4,400-word Hinge Health Report this past week, which is why this newsletter is mostly just a prompt to dig into the report. More background on it after a few links below...

  • As I predicted in last week's newsletter, Akili Interactive, which has been waiting on FDA authorization for a long time, launched a version of its ADHD digital therapeutic, Endeavor, under FDA's latest non-enforcement guidance. No cost to families who qualify. The company is still pursuing 510(K) too: More here.
  • Samsung just received authorization from South Korea's medical device regulatory agency to market its SaMD cuffless blood pressure monitoring app: "Once your Galaxy Watch Active2 device has been
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4.17.20
10 min. read

Analysis: FDA’s new guidance for digital therapeutics

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Issue 048.

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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:

  • As part of the effort to make virtual care more accessible during the COVID--19 pandemic, the FDA posted a new enforcement guidance focused on digital health devices for the treatment of psychiatric disorders. Given how many DTx companies are focused on behavioral health, this move by the FDA has a lot of companies re-examining their go-to-market timeline. I pushed back the MSK report a few days as I've been on the phone with readers non-stop trying to getting my head around this guidance. Read more on the FDA's in today's top story below...
  • Decisions Resources Group has a worthwhile report out on payers' perspectives around digital therapeutics that is based on responses from 157 P&T committee members at
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