Issue 111
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 happening this week in the world of pharma digital products and FDA-regulated digital health:
- Facebook is looking to hire a QMS compliance expert as well as a legal counsel with FDA regulatory experience (software and hardware medical devices). Based on this job description, the company’s future AR/VR products are likely to cross the line into Class I or Class II medical device territory. “The Facebook Reality Labs (FRL) team at Facebook builds the AR/VR hardware and platform to let you experience anything, anywhere, with anyone. Additionally, Facebook has teams dedicated to building social experiences in AR/VR that make it easier to spend time with your friends, wherever they are. Augmented/Virtual reality’s potential to connect the world is immense—and we’re just getting started. Our FDA Compliance team is responsible for ensuring all Consumer products being developed by FRL meet all applicable FDA Regulatory requirements including the implementation of any requirements Quality Management System (QMS).” I remember — seven years ago — Zuckerberg mentioned wanting to add virtual visits via VR to his (then) new acquisition, Oculus. That was before VR-based digital therapeutics were proliferating. Clearly, the team has bigger ambitions now.
- Are there any pharma companies with a focus on Alzheimer’s not working with Evidation Health at this point? Evidation has worked with Eli Lilly and Apple on Alzheimer’s. It’s working with Apple-Biogen on it too. This week: Evidation inked a deal with Merck “to investigate the utility of remotely collected digital measures to detect and monitor the treatment of Alzheimer’s Disease.”
- Akili Interactive showed that an FDA-regulated, prescription-only digital therapeutic can evolve its wrapper without needing a new FDA clearance (because its core therapeutic components stayed the same): “Leveraging insights from caregivers and patients, Akili game designers and engineers have created additional gameplay experiences that offer exciting new quests and increased optionality, including new personalized universes and character choices to enhance engagement in the prescription digital therapeutic. Enabled by the adaptive ability of digital therapeutics and the dynamic nature of video games, these enhancements evolve the gameplay experience for patients while preserving the regulated core technology of the product.”
- The FDA cleared Dexcom’s G6 CGM system with a 510(k) clearance for its “Dexcom Partner Web APIs, enabling invited third-party developers to integrate real-time CGM data into their digital health apps and devices.” Teladoc (Livongo) and Garmin are among the Dexcom partners trying the APIs out.
- Many of the comments on the MCIT reimbursement proposal from earlier this year just saw the light of day last month. One thing I didn’t notice is that in the Digital Therapeutics Alliance’s comment (written in April), the group highlights the new Remote Therapeutic Monitoring (RTM) codes while making clear it believes CMS needs to still create a designated benefit category for DTx: “Recognize that reimbursement for digital therapeutics is not only tied to clinician-related services via remote physiologic monitoring (RPM) or remote therapeutic monitoring (RTM) coding. It is necessary for CMS to differentiate between clinician-provided services and DTx-delivered interventions, thus reinforcing the importance of evolving CPT coding related to DTx product use and acknowledging the necessity of a separate benefit category for digital therapeutic products.”
- One more thing… The always-great IQVIA report on digital health trends is out for 2021. Lots of great info in here. I’m sure you’ve already come across it, but if not — download it here (email registration required).
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Pear Therapeutics’ 2019, 2020, Q1 2021 revenue plus ownership breakdown by investor/exec
As part of its SPAC merger, Pear Therapeutics shared more financial information with Wall Street analysts this past week. Here’s a quick rundown:
2019 Annual Revenue: Pear booked a total of $32.6 million in revenue two years ago, which might be its best year ever. The company noted that its early revenue was predominantly from two agreements with Novartis that have since been terminated. One was a commercial agreement (with Sandoz for reSET-O) and the other was R&D (with Novartis for the schizophrenia DTx).
2020 Annual Revenue: Pear shared that it booked $9.4 million in revenue last year. In a different filing, Pear broke this figure down a bit more. Of that amount, $149,000 was revenue from their products, while a little more than $9.2 million was from collaborations and licensing revenue — likely the last payment of its Novartis R&D agreement.
2021 Quarterly Revenue: Pear also shared its revenue from the first quarter of this year. The company booked a total of $376,000 so far. Of that, $300,000 was product revenue and just $76,000 was from collaborations and licensing. Remember, Pear plans to end up at $4 million in annual revenue for this year. If it achieves that amount, it’d be less than half of last year’s figure. However, the company has already booked twice what it brought in for product revenues in all of 2020.
2021 Quarterly Costs and OPEX: Just to put the $376,000 in more context, Pear also posted more than $21.5 million in costs and operation expenses for the first quarter of 2021. At that run rate, it might hit $4 million but it would spend more than $80 million this year (I’m guessing the company plans to spend more of its SPAC coffers than that though?)
Who owns Pear Therapeutics? Post-merger, Pear Therapeutics’ current shareholders will own a little more than 70 percent of the combined company, which the SPAC transaction valued at about $1.6 billion.
Here’s how the current ownership of Pear breaks down pre-merger (I’ll ignore the common vs. preferred shares detail and skip to the converted percentages.)
The funds that own five percent or more:
- Temasek Life Sciences owns 22.2 percent.
- 5AM Ventures owns 16.5 percent.
- Softbank Vision Fund owns 10.4 percent.
- Arboretum Ventures owns 9.7 percent.
- JAZZ Venture Partners owns 9.4 percent.
The company founders, executives, individual investors, and directors who own a substantial amount of the company pre-merger:
- Corey McCann, M.D., Ph.D. owns 9.7 percent.
- Christopher D.T. Guiffre, J.D., M.B.A. owns less than 1 percent.
- Erin K. Brenner owns less than 1 percent.
- Katherine Jeffery owns less than 1 percent.
- Yuri Maricich owns less than 1 percent.
- Ronan P. O’Brien owns less than 1 percent.
- Julia Strandberg, M.B.A. owns less than 1 percent.
- Nancy Schlichting owns less than 1 percent.
- Elena Viboch owns less than 1 percent.
Correction: In the newsletter version of this article I incorrectly stated that three of Pear’s investors had individual stakes in the company in addition to their venture firms’ ownership.
Trial updates: Happify Ensemble, Anthem-Apple, Dopavision, Noom, Big Health, Optum
Happify reveals details on its first prescription digital therapeutic: Ensemble for GAD or MDD
The big study announcement this week came from Happify Health. The company, which is best known for its direct-to-consumer offerings, shared details about Ensemble, a prescription-only digital therapeutic for people with generalized anxiety disorder (GAD) or major depressive disorder (MDD). (Targeting either condition with one DTx is an unusual move.)
What’s particularly interesting about the Ensemble study is that it was made possible thanks to the FDA’s enforcement policy waiver for psychiatric digital health devices during the pandemic. Unlike other DTx pandemic waiver launches, Happify is not actually launching Ensemble. The policy, however, gives it more wiggle room to set up this RWE-like clinical trial (with self-reported outcomes measures) pre-FDA authorization instead of pursuing a more traditional RCT. (Happify and most media reports referred to this as a “launch”, but the product is not commercially available and it may not be for years.)
Here’s the gist of the single-arm study:
“This study aims to assess the safety and efficacy of HPDT-DA-013 digital therapeutic in adults ages 22 years and older with MDD or GAD. Participants access HPDT-DA-013 on their smart device or computer and complete treatment over a period of 8-10 weeks. During the treatment period, participants complete PHQ-9 and GAD-7 assessments, as well as safety and medication use questionnaires. After 8-10 weeks, participants will complete end-of-treatment assessments, and access to HPDT-DA-013 will be removed. Participants are then followed for a period of 12 months.”
Happify expects to enroll about 750 participants into the study, but it could end up with a larger group. For those interested in Ensemble who make inquiries about it on the company’s new Ensemble website, declining to participate in the study means no access to Ensemble. After all, this is a patient safety study, in part, so that move makes sense.
Happify will use the results of this study as part of its eventual submission to the FDA. Given that this study won’t be completed until 2023, that might be some time from now. I’m curious to see what the FDA makes of this digital therapeutic, which is trans-diagnostic for GAD and MDD. (While this trans-diagnostic approach is not the same as a comorbid one, I’m reminded that Pear’s Somryst originally wanted to make a claim around depression as well as insomnia, but when Pear announced its FDA market authorization there was no mention of the depression indication anymore.)
Anthem and Apple tweak inclusion criteria for asthma study
Here’s a small update for Anthem and Apple’s Asthma Digital Study. The prior post for this study included inclusion criteria that the participant had at least one emergency room visit in the past 24 months along with an associated asthma diagnosis. The companies widened that criteria quite a bit by adding:
“1+ emergency department visit in the preceding 24 months with an associated asthma diagnosis, or a combination of factors that might be associated with uncontrolled asthma. Factors include:
- History of asthma medication prescriptions
- History of asthma-associated primary care visits
- Diagnosis of chronic sinusitis, pharyngitis, influenza, allergic rhinitis, hypertension, diabetes, and/or obesity
- History of smoking
- Age and zip code”
The other notable thing about this study that I’m not sure I’ve pointed out in the past is that it ticks that states it is studying an FDA-regulated device. Now, is that because it includes an Apple Watch (FDA cleared for its ECG capabilities) or because this forthcoming asthma software from Apple will be a Class II SaMD too?
Dopavision reveals details on sham device-controlled, 24-month study
Dopavision, which just raised $14 million, posted details of a new clinical trial for its myopia digital therapeutic. The company will instruct some participants to use a sham version of its device twice a day:
“Sham comparator using the same device and components but without the actual treatment.”
More on the study:
“The present study is a multicentric, randomized controlled, double-masked trial to investigate the safety and efficacy of MyopiaX, a digital treatment to slow myopia progression as compared to a sham treatment. The trial consists of a 24 month active treatment period followed by a 12-month treatment-free follow-up. 234 children and adolescents aged 6 – 14 years will be included in the trial. Eligible subjects will be randomly assigned in a 2:1 distribution to either the treatment or the sham group.”
Study suggests Noom plans to take on breast cancer
Weight loss company Noom revealed a little bit about its cancer-focused program, called Healthy Habits for Cancer (HCC) in a recent clinical trial posting. The study is looking to enroll about 30 people to help the company iterate HCC:
“This mixed methods study will involve obtaining user feedback on the first 4 weeks of the Healthy Habits for Cancer (HCC) Program. Short pre and post surveys and in-depth qualitative interviews will be conducted exploring their views on the app (features they liked and didn’t like), the extent to which they believe the app would have to be further adapted, how they would feel about such an app being embedded in their cancer care and when in their care pathway they would like to be offered it.”
Noom is now recruiting for its NASH study too
Another Noom study, which E&O has mentioned before, has begun enrolling its 40 hoped-for participants, but it’s not a new program from Noom. The company’s NASH study is studying the effects of its flagship program in a NASH patient population:
“This study will be a proof of concept study to evaluate weight loss efficacy of Noom Healthy Weight (HW), a mHealth lifestyle intervention, in patients with [Nonalcoholic Steatohepatitis] NASH.”
Big Health’s study on Sleepio (vs paper leaflet) for stroke patients completes enrollment
Big Health finished up enrollment for its study on Sleepio for stroke patients after 86 participants signed up. The study should be finished in January.
“The efficacy of this intervention has been demonstrated in people with chronic insomnia but has not yet been tested in people with stroke. The study, therefore, aims to determine whether digital CBT-I is effective for improving sleep quality in chronic stroke survivors. Participants will be randomized to receive either digital (online) CBT-I or a leaflet with sleep hygiene information. The primary outcome is the change in self-reported sleep quality, assessed using the Sleep Condition Indicator. Secondary outcomes include changes in sleep fragmentation and wake after sleep onset assessed with actigraphy, self-reported sleep onset latency from the sleep diaries, anxiety and depression using the PHQ9 and GAD7, quality of life using the SIS-8 and EQ-5D-5L as well as changes in healthcare costs during the 8-week follow up.”
Optum, American Heart Association study digital interventions for vaping cessation
Optum just posted details about a study focused on vaping cessation:
“The aim of this study is to test intervention components to help young adults quit vaping. A 2×2 factorial design will be used where all participants receive quitline-delivered behavioral phone counseling, and components to be tested are a digital intervention (with text and online cessation support) and nicotine replacement therapy (NRT).”
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