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.

Last week I mentioned that I’d heard the Francisco Partners sale of CapsuleTech to Philips (along with prior sales of 2net and Motion) might have yielded a multiple approaching 10x what FP paid Qualcomm for the assets a few years back. I received some pushback on that multiple from someone who would know (but couldn’t provide any details). No one is disputing that FP did very well here. If you know the numbers and want to compare notes with me, hit reply.

Here’s what’s happening this week in the world of pharma digital products and FDA-regulated digital health:

• Spain-based pharmaceutical company Almirall and Happify Health inked the big DTx deal this week. The companies will co-develop a version of Happify’s Kopa platform specifically for people with psoriasis. They plan to roll out the program, named CLARO, in Spain, UK, Italy, and France by the end of 2021. CLARO is focused on mental health issues comorbid with psoriasis since they can trigger flare-ups.
• Last week, Hims & Hers went public via a SPAC merger, so it’s no surprise that its rival Ro is reportedly in talks to do the same. (But I would be surprised if this is the target of the Tullman-Klasko-Taneja SPAC I wrote about earlier this week, even though Ro is a prized portfolio company of that SPAC’s sponsor, General Catalyst.)
• FDA’s CDER released its plans for new and revised draft guidances in 2021 and the lone digital health-related one is: “Use of Digital Health Technologies for Remote Data Acquisition in Clinical Investigations.”
• Otsuka, which acquired the assets of ingestible sensor company Proteus Digital Health last year, hasn’t abandoned other medication tracking technologies: It just partnered with Spencer Health Solutions to “create a transformational patient experience using the spencer smart hub,” which is an “at-home medication device that connects patients and their care teams through an easy-to-use, fully integrated platform.” The device is a pill-dispensing, countertop appliance (about the size of a breadbox, which should be a helpful reference for all my readers over 90).
• Speaking of the agency, that proposal from HHS to exempt a ton of medical device subcategories from the 510(k) process that I wrote about two weeks ago has only garnered five comments from the public so far. Of the ones that the public can read, two are in support of it. I guess most people assume it’s too ridiculous to comment on?
• The new CEO at iRhythm, Michael Coyle, gave a great interview to MedTechDive this week, especially relevant after all the M&A in remote cardiac monitoring this month: “Two things happened at the beginning of December: One was that a Category I permanent code was agreed to for the extended monitoring. That’s a big win for the technology. Now, we have a permanent code, which is very helpful because it allows us to go to provider systems and give them confidence that if they build this into their workflow … the device isn’t going to lose coverage. What Medicare chose not to do was to apply a single national price for the technology and referred that down to the [Medicare Administrative Contractors (MACs),] the regional Medicare administrators.”
• This is the second week with zero new digital health products in Germany’s DiGA database of (temporarily and permanently) reimbursed products. Huh.
• Meanwhile, in Belgium, a DiGA-like program is just kicking off. The first digital health program to secure reimbursement from the government in that country is the moveUP Coach app, which offers coaching and exercises to patients and caregivers following a total hip or knee replacement surgery. The new reimbursement pathway is open for other applicants now too.
• This is from two weeks back: Talkspace announced that it had secured just under $7 million in grants from the NIH. Most of the money will go towards a four-year RCT “that compares daily messaging-only therapy to once weekly live video session therapy in a randomized controlled trial to evaluate the effectiveness of the different forms of care. The project will track outcomes, engagement, ratings of the therapist, type of treatment provided, and other important variables between the two forms of care to see if there are any differences.”
• One more thing… Blue Note Therapeutics, which is developing prescription digital therapeutics and diagnostics for people with cancer now has three trademark filings for the names Aquila, Cerena, and Attune. The description for each is simply: “Downloadable computer software for diagnosing and treating comorbidities of cancer.”

Digital Therapeutic Alliance drops medication optimization from its core principles framework

I’ve referenced this before (because I found it in a letter to a government agency) but this month the Digital Therapeutics Alliance officially updated its framework for how it categorizes digital therapeutics, which is markedly different from its original, foundational whitepaper back in 2018. The original framework included digital therapeutics that:

• address a medical condition
• manage or prevent a medical disorder or disease
• optimize medication
• treat a medical disease or disorder

Today, the DTA uses just three buckets:

• treat a disease
• manage a disease
• improve a health function

That third category also includes digital therapeutics that prevent a disease. (Update: Read this post all the way to the end for some clarification from the DTA.)

There are a number of other tweaks to the framework, but dropping “optimize medication” and removing language that references mono-therapies vs “directly supports a concurrent treatment” is a clear move away from medication adherence.

The evolution of this framework reminds me of a conversation I had recently with Cognito Therapeutics CEO Brent Vaughan. He explained the evolution of digital therapeutics as starting with companies that were largely delivering value by supporting the concurrent therapy (pharmaceutical) in some way. So, the earliest digital therapeutics companies started with medication adherence.

Right now, digital therapeutics are mostly app-ified versions of health coaches that deliver cognitive behavioral therapy (CBT). Pear Therapeutics is a prime example of this category, but its pipeline has non-CBT offerings in it too.

The next wave will look more like the first DTx offerings from Akili, Cognoa, and Cognito. These companies develop digital therapeutics that are attempting to more directly rewire the brain. For one example, here’s how Akili explains its core mechanism of action:

UPDATE: Response from the Digital Therapeutics Alliance

Following this newsletter’s publication, DTA’s leader Megan Coder sent a clarifying statement and I included an excerpt below:

Pear Therapeutics launches Facebook, Instagram ad campaigns to drive Rx-only Somryst DTx

Just as pharma companies’ legendary direct-to-consumer TV ads drove people to request certain medications from prescribers, it was only a matter of time before prescription digital therapeutics companies would use targeted, social media marketing campaigns to drive consumers to their online portals where telemedicine prescribers were standing by.

Pear Therapeutics started doing just that this month by kicking off Instagram and Facebook ad campaigns for its prescription-only digital therapeutic for chronic insomnia, Somryst.

The creatives include openers like:

And:

The campaign includes about 180 versions of creatives across both platforms and kicked off on January 16th. The ads link to the Somryst website, where people can schedule an online visit with a prescriber. I can’t tell from the interface that Facebook provides looky-loos like me, but I imagine Pear is targeting these to people on Facebook in the middle of the night for their time zone.

And, as far as I can tell, Akili Interactive has not launched a campaign like this for EndeavorRx yet and Pear has not launched campaigns like this for its reSET and reSET-O offerings. Orexo, however, kicked off a Facebook ad campaign for its alcohol use disorder (AUD) digital therapeutic, vorvida, on New Year’s Eve. Vorvida, however, is an over-the-counter DTx.

On that rumor about Apple’s non-invasive blood glucose feature…

Reports about rumored features of upcoming Apple products are commonplace ahead of expected launches.

In recent weeks, a report from a Korean publication breezily stated that Apple would add a non-invasive blood glucose feature to the Apple Watch Series 7 this year. (I kind of think the report was lost in translation.)

Even so: It’s no secret that Apple has worked on a feature like that for many years.

One of the first sensor architects for the Apple Watch was Bob Messerschmidt, an expert in optics and spectroscopy. Apple hired him by acquiring his startup, Rare Light in 2010. (A quick search of Rare Light’s patents show a number of them relate to non-invasive blood glucose sensing.) He spent the next three years working on the Apple Watch before leaving in 2013 — about two years before the Watch actually surfaced.

These days Apple’s top optics researcher appears to be Miikka Kangas. Kangas is the lead inventor listed on most of Apple’s relevant patents in the past few years, and his LinkedIn says he’s been working at a confidential company since January 2014, which is soon after Messerschmidt’s departure.

Kangas lists out: “Medical Optics, Hyperspectral Sensors, Ultra-Low Noise 1/f stabilized Sensor Systems, Experimental Platforms, Dual BSG Tunable lasers, Novel Detector Development, Nonlinear optics, Super-continuum lasers, AOTF, Confocal Optics” as his recent focus areas. He also has a buried mention that his work experience includes “Noninvasive Medical Spectroscopy” at his current, unnamed employer. (He’s only filing patent applications for Apple so it’s not much of a mystery.)

Anyway, there’s no question that Apple has been working on this for years. But have they finally figured it out? Who knows.

In all likelihood, if Apple does manage to figure out non-invasive blood glucose monitoring for its Watch, the company will follow the same FDA playbook it used to bring its ECG software to market. Apple will convince the FDA to leave the hardware (sensor) unregulated, while the agency will clear the software component of the offering via a De Novo or other 510(k) pathway, Jason Brooke, the VP of Regulatory & Quality at AmalgamRx predicted in a note to E&O.

Links to E&O’s 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.