Issue 235
Welcome back to E&O: SaMD, a paying subscribers-only weekly newsletter focused on the world of digital pharma products, prescription digital therapeutics and other FDA-regulated digital health.
E&O: Software as a Medical Device
Here’s what’s new in FDA-regulated Software as a Medical Device….
- Correction: In Issue 234 of this issue I used the incorrect phrase to describe Mahana’s listing in the VA’s MedSurg catalog. I should not have written that the company had “secured reimbursement” but the other descriptions of Mahana IBS being listed in MedSurg and priced were the better way to report on the situation. E&O regrets the error (and much else).
- Related: See today’s top story below for more on Mahana Therapeutics, which entered into a process of asset liquidation recently. It’s not a formal bankruptcy process, but rather what some call “a private funeral” that almost certainly spells the end for another pioneering prescription digital therapeutics company. (More below.)
- One reader last week asked for a list of all of the digital health companies that are listed in the VA’s MedSurg catalog along with their pricing. Here’s what I came up with (let me know if I missed any?):
- AppliedVR’s RelieVRx — Immersive Therapeutic Virtual Reality device, for chronic low back pain, 56-session treatment including patient services for adherences reminders and/or progress reports. $2,889.45
- Orexo US, — vorvida — Evidence based digital therapy for alcohol management. It’s a 6-month online program that can break negative thought patterns and responses to change behavior around alcohol. $345.58
- Orexo US — deprexis — Evidence based digital therapy for depression. It’s a 3-month online program that can help people create more positive thoughts and behaviors. $260.05
- Orexo US — MODIA — Digital therapy for opioid use disorder. It’s a 6-month therapy based on cognitive behavioral therapy techniques and should be used as part of a supervised medication-assisted treatment program for OUD. $576.73
- NightWare — Digital Therapeutic Platform for reduction of sleep disturbance related to Nightmare Disorder or nightmares from PTSD. $6,827.62
- In other news… GAIA is now recruiting for its RCT focused on alivia, a digital therapeutic for borderline personality disorder, that the company is likely prepping for a future launch in Germany.
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Mahana Therapeutics is insolvent and started the process of liquidating its assets
In late August, Mahana Therapeutics, one of the early pioneers of prescription digital therapeutics determined it was insolvent and began the “assignment for the benefit of creditors (ABC) process, a common alternative to formal bankruptcy proceedings, that some call “a private funeral.” Mahana Therapeutics tapped Silicon Valley’s ABC specialists, Sherwood Partners, which set up an LLC named Mahana LLC on August 30, 2024 that will act as a temporary trustee of the company’s assets. (Read the general assignment agreement between the two Mahana’s here.) TechCrunch once called Sherwood Partners the “Terminator of Startups” since it has helped so many insolvent startups unwind.
Mahana did not respond to requests for comment after E&O learned about its insolvency.
Some former Mahana employees have also posted on LinkedIn about departing the company and one attributed it to “funding challenges”.
Remember: Other individual prescription digital therapeutics from liquidated companies have returned from the brink (so this might not be the last we hear of Mahana IBS, for example), but Mahana Therapeutics as an entity is likely not going to make a return. According to an article explaining how ABCs work on Sherwood’s website:
“An ABC is a liquidation vehicle. It is not a process by which a company can reorganize, obtain a discharge, or otherwise emerge from insolvency. Thus, the company’s board of directors, officers, and investors need to accept that their control over the company and its assets will cease following commencement of an ABC. In addition, shareholder equity will have no value unless there is money left to distribute after the costs of the ABC are funded and all creditors have been paid in full.”
Background on Mahana Therapeutics Products: Mahana offered a few digital health products at the time of its demise: The company’s FDA-cleared prescription digital therapeutic for IBS named simply Mahana IBS. Its second offering was Mahana Tinnitus, which was not FDA-cleared and did not make any treatment claims. Finally, the company acquired a Germany-based digital health company that created Cara Care, a digital therapeutic for IBS that was listed on Germany’s national digital formulary (DiGA).
Funding and investors: According to Pitchbook, Mahana Therapeutics has raised $83 million to date from investors like Jazz Venture Partners, Lux Capital, Gurnet Point Capital, Asabys Partners, KKCG, Main Street Advisors, and the DigitalHealth.London Accelerator.
Recent deals: Mahana inked a commercialization deal with Bayer’s consumer health division in the summer of 2023. And as noted above and in a previous newsletter, its IBS-focused digital therapeutic was recently listed in the VA’s MedSurg catalog. I’ll keep an eye out for where Mahana’s assets end up.
Tinder co-founder’s startup Happy Health quietly secures FDA 510(k) clearance for its mental health-focused smart ring
A few years ago, Happy Health made headlines after it joined the growing number of startups looking to break into the smart ring wearable market. Apart from raising $60 million in early funding, the company is perhaps best known for its founder — Sean Rad, who also founded the dating app company Tinder and served as that company’s CEO for a number of years. While it hasn’t announced it yet, Happy recently secured FDA clearance for its smart ring, named Happy Ring, which the company sometimes describes as “a clinical lab wrapped around your finger” as well as “the first real mood ring”. The ring features:
- a continuous EDA (electrodermal activity) sensor for measuring changes in conductivity produced in the skin due to increases in the activity of sweat glands, which can help measure stress levels.
- a broad spectrum PPG sensor, which is usually used for measuring various heart-related physiological parameters like heart rate, HRV, blood oxygen saturation and more.
- an accelerometer and
- skin and ambient temperature sensors
As of Friday, October 4, 2024: The FDA has yet to post a summary document describing the ring’s new cleared claims, but the product codes assigned to the device suggest that the clearance could cover a number of claims that leverage heart rate, HRV, blood oxygenation, temperature, and respiratory rate.
Update on Monday, October 7, 2024: The FDA posted the summary document detailing the Happy Ring’s authorized marketing claims. Here’s what the ring is now cleared to do:
“The Happy Ring Health Monitoring System is a wearable device system to remotely monitor physiologic parameters of patients in professional healthcare facilities, such as hospitals or skilled nursing facilities, or their own home. The device is intended for use on individuals who are 22 years of age or older.
The device supports continuous data collection for monitoring of the following physiological parameters:
- Acceleration / Movement
- Electrodermal Activity (EDA)
- Blood Oxygen Saturation
- Pulse Rate
- Peripheral Skin Temperature
The Happy Ring Health Monitoring System is intended for peripheral skin temperature monitoring, where monitoring temperature at the finger is clinically indicated.
The Happy Ring Health Monitoring System is not intended for SpO2, pulse rate, respiration rate monitoring in conditions of motion or low perfusion.”
Details: Wyoming Medicaid reimburses for Cognoa’s digital quasi-diagnostic Canvas Dx for autism
News you know: Wyoming Medicaid began paying for Cognoa’s digital quasi-diagnostic for autism, Canvas Dx, starting on July 1. As expected, Wyoming instructed providers to bill for Canvas Dx using HCPCS Code A9291, which was the code that the CMS HCPCS Committee modified so that Cognoa could use it even though their offering is not a therapy. Here’s how Wyoming Medicaid suggests providers bill for Canvas Dx: The following codes will be utilized throughout the Canvas Dx assessment:
- HCPCS A9291: digital cognitive and/or behavioral therapy tool
- Billed by Autism Path 2 Care (AP2C)
- CPT 96112: developmental test administration, by a physician or other qualified health professional, with interpretation and report; first hour would be assigned for this service.
- CPT 96113: each additional 30 minutes
It is notable that the Medicaid plan calls out the name of the practice that will bill the HCPCS code — Autism Path 2 Care (AP2C) is a relatively new virtual clinic that is led by a Cognoa consultant. While the ownership structure and exact affiliation is unclear, it seems like AP2C, which is operating in a few states so far, is Cognoa’s virtual clinic arm. It’s similar to how Swing Therapeutics and Swing Care operate as well as Oui Therapeutics and its spin-out virtual clinic company Vita Health Care.
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