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.
If you are reading this in your inbox on your phone, does this newsletter looks a bit better? It should: There was a bug in the code that my team finally figured out. (This is good timing. Bet reading things on phones really takes off this year.)
Kind of surprised more E&O subscribers didn’t send in a guess for this week’s trivia question. (A few responses, but only one correct answer so far.) There’s still time — check your inbox for E&O Mondays and hit reply. You know this one because the answer is in a previous E&O report.
I expect next week to bring forth a Zoom-powered deluge of virtual JPM news, but here’s what’s happening this week:
- Lots of great feedback on E&O’s UnitedHealth Group Report. Please keep it up. I have some ideas but let me know if you have a suggestion for the next one.
- I’m teaming up with Eugene Borukhovich (former Global Head of Digital Health Innovation at Bayer) on his limited series podcast focused on digital therapeutics. I’ll parachute into each interview session to ask one question to his guests. In the first episode, Eugene insisted on interviewing me — you can listen here. Interviews with real experts to follow.
- Blue Note Therapeutics disclosed that its first digital therapeutic, which helps “adults with cancer cope with stress and anxiety related to the COVID-19 pandemic” has been used by 12,000 people so far. Blue Note released it thanks to the psychiatric-related digital health devices waiver that the FDA posted earlier in the year. It is a precursor to a prescription digital therapeutic that Blue Note is developing.
- The German government added two new (temporarily) reimbursed digital therapeutics to its DiGA library of digital health products: an online depression course and an app for stroke patients. I added them along with pricing info to the E&O database here. There are 10 reimbursed digital health products in that formulary now.
- This can’t be good for The Digital Therapeutics Alliance’s SEO: Australian researchers published a piece in JMIR that coins a new term for the digital age, the “digital therapeutic alliance”, as an update on the longstanding concept of the therapeutic alliance (TA), which is “the relationship that develops between a therapist and a client/patient.”
- Tidepool, a nonprofit, announced today that it “was notified on December 22, 2020, that the submission had completed FDA’s administrative acceptance review and was proceeding to substantive review as an interoperable automated glycemic controller (iAGC). If cleared, Tidepool Loop could become the first app for iOS cleared for the automatic dosing of insulin.” Tidepool is also one of the few companies/organizations participating in the FDA’s Pre-Cert pilot.
- Mind Cure, a company that is combining psychedelic therapy with digital therapeutics made the DTx piece of its offering available: “iSTRYM’s app component will record patients’ uncategorized data, such as weather, location, mood, heart rate, and other metrics that take place after therapy sessions and throughout therapeutic integration.”
- One more thing… A study of the FDA-cleared, digital-only contraceptive NaturalCycles that included 5,879 women who contributed an average of 10.5 months of data backed up the app’s previous studies: “With typical use, the app had a 13-cycle cumulative pregnancy probability of 7.2% and a 1-year typical use PI of 6.2. When the app was used under perfect use, the PI was 2.0.”
If someone forwarded this to you, they are not-so-subtly-insisting that you join them as a paying subscriber to E&O. Don’t let them down. The first step is to head to this page and dust off that corporate card.
Novartis study finds no meaningful impact for Pear’s schizophrenia prescription digital therapeutic
The results are in for Pear Therapeutics’ schizophrenia-focused prescription digital therapeutic, Pear-004, and they’re not good. Pear has worked with Novartis to develop the intervention for the past few years.
Back in March 2018, the companies explained the collaboration like so:
“Novartis will work with Pear to advance clinical development of their THRIVE digital therapeutic for patients with schizophrenia. THRIVE has demonstrated potential usability, retention and preliminary efficacy in patients with schizophrenia in early clinical studies.”
By the end of 2018, a clinical trial kicked off:
“The purpose of the study is to determine in patients currently being administered antipsychotic pharmacotherapy whether PEAR-004 can further reduce symptoms of schizophrenia as measured by the Positive and Negative Syndrome Scale (PANSS).”
The study was a randomized, sham-controlled trial that included 112 participants at the start. Its primary outcome measure, PANSS, “is a well-validated, standardized method of evaluating and monitoring psychotic symptoms” that assesses “hallucinations, delusions, thought disorder” as well as” blunted affect, abstract thinking and general symptomatology.”
In Novartis’ report on the clinical trial’s results for participants, the pharma company explained:
“Did the PEAR-004 app lower the severity of the participants’ schizophrenia symptoms? The participants who used either app had lower severity of schizophrenia symptoms by the end of this trial. The clinical trial team concluded that the PEAR-004 app did not have a meaningful effect.”
One of the other measures was whether using PEAR-004 helped keep participants in the trial. Here’s the conclusion from Novartis:
“Did the PEAR-004 app affect if a participant stayed in this trial? The clinical trial team concluded that the PEAR-004 app did not affect if a participant stayed in this trial.”
Pear’s intervention did manage to keep 48 out of 56 participants in vs. the sham’s 44 out of 56, but that difference wasn’t significant.
On the upside, Novartis did conclude that the intervention was safe as it didn’t cause any serious adverse events, while the placebo arm did include one participant who reported suicidal thoughts.
Novartis also took a broader look at other potential positive outcomes from the trial, but still concluded that “the PEAR-004 app did not affect other aspects of schizophrenia more than the placebo app.”
These were the other areas Novartis looked at:
- Motivation or enjoyment from life
- General quality of life
- Overall level of depression
- Opinions and willingness to take their medicines to treat their schizophrenia symptoms
- PANSS responses when compared in different ways
“The team found that the PEAR-004 app did not have a greater effect on any of these aspects of schizophrenia compared to the placebo app.”
Notably, despite not having FDA market authorization for PEAR-004, the company brought the DTx to market thanks to the FDA’s waiver for psychiatric digital health devices during the COVID–19 pandemic. The real world data that Pear is collecting during this temporary roll-out may provide a second chance for the company as it continues to work towards FDA clearance.
So the disappointing results in this Novartis-sponsored study build on a concerning track record for Pear. E&O pointed out in Issue 077 that ICER had dismissed the evidence base for Pear’s reSET-O intervention in a scathing review last year, which also hinted at similar concerns with Pear’s reSET intervention too.
Merck GHI Fund prez talks strategy, roll-ups, and Preventice pulling in $160M in annual revenues
In November Bill Taranto, president and general partner at Merck Global Health Innovation Fund (GHI) gave a great 12-minute talk to an audience of other corporate VCs about how GHI operates.
The presentation offered up a few insights about how Merck GHI approaches investments, what will likely happen to some of the digital health companies in its portfolio currently, and what is likely its biggest digital health-focused portfolio company, Preventice.
Taranto explained that because GHI is both a venture fund and a private equity fund now, it often has a roll-up strategy in mind even when making investments via its VC fund. GHI starts by finding what it calls an “anchor tenant” that “solves between 50 to 60 percent” of a problem. GHI invests in that company and then begins to invest in complementary companies that could fill in some of the anchor’s capability gaps.
“Then we ask those companies to work together in vendor agreements, go-to-market relationships, or even platform collaborations. The ultimate goal for us is to potentially roll those companies up into a single NewCo. And by doing that we bring scale and value to market.”
“I will give you an example of how we have done that. In 2010, one of the problems we were trying to solve at GHI was the problem that patients were having strokes due to AFib. So, we identified an anchor tenant in a company called Preventice. Preventice had the whole frontend of the solution: They had the device, the algorithms, and the software. So, we made a $2 million investment in Preventice.”
Taranto said his team quickly realized that Preventice needed a call center, remote consults with cardiologists, remote review by electrophysiologists, and the ability to ship and deliver its digital health devices. eCardio had all those capabilities. So, in 2015 GHI merged both Preventice and eCardio together by acquiring them.
“We also brought in a partner, Boston Scientific. We realized we weren’t a cardiovascular company and that we needed help. We sold 25 percent of the company to Boston Scientific, and we actually paid back Merck for all the capital we originally invested. After that, we identified other gaps with our new partner Boston Scientific. We realized we needed care coordination, so we bought a care coordination company. We realized we needed algorithms, so we bought an algorithms company.”
GHI is now considering whether to find an exit for Preventice:
“Preventice is now a $160 million revenue company valued at over $1 billion. We at GHI still own 40 percent of the company. We are still trying to figure out what to do with it. Should we IPO the company? Private sale? Or continue to build the company?”
The details here are interesting but the overall strategy also has me taking a hard look at the other digital health companies in GHI’s portfolio like Welldoc and Ayogo or Koneksa Health and Antidote. Which are anchor tenants? Which are gap fillers?
E&O research reports, databases, newsletters
After a few, simple design tweaks, The Exits & Outcomes site is now better organized to make it easier to find long-form research reports, databases, and past newsletter editions. Click below for dedicated pages for each of those categories:
Read through the long-form E&O research reports here.
Search and sort the E&O databases here.
Skim more than 90 past issues of E&O newsletters here.
Let’s call that Issue 083 of E&O Fridays.
