Issue 191

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.

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

• Health Canada, which regulates medical devices in Canada, has greenlit a prescription digital therapeutic for irritable bowel syndrome, Regulora, for the Canadian market. While Regulora’s developer metaMe has already secured FDA clearance for Regulora and launched it commercially in the US, it partnered with Canadian venture studio LaunchIt Ventures (via its subsidiary LaunchIt DTx) to manage its Canadian go-to-market. The indications for use (IFU) for Regulora are nearly identical for both the US and Canadian versions of the product. Regulora Canada requires a referral from a physician. More here.
• The news you know: Earlier this month the FDA granted a de novo clearance to Masimo’s Opioid Halo, a remote patient monitoring system that includes a wrist-worn device that continuously monitors “for the identification of when they may be experiencing a substance-induced impairment of oxygenation.” The system is specifically focused on people taking opioids. The FDA’s classification letter is here and the Masimo announcement is here.
• Despite Pear Therapeutics’ recent bankruptcy troubles, the company’s core products got a shoutout in the White House’s 2023 budget. The NIH’s National Institute on Drug Abuse (NIDA) budget request pointed to reSET and reSET-O as notable past recipients of the institute’s grant program. NIDA is asking Congress to boost its Office of Translational Initiatives and Program Innovations budget by an additional $8.6 million more than last year for a total of $48.5 million to help it bring more innovations like reSET and reSET-O to market. “Many of these efforts take the form of innovative new technology applications, from mobile apps that help patients find open beds in addiction treatment facilities or connect to support communities to more sophisticated medical devices. These tools provide or support psychosocial and medication-based treatment, help individuals sustain their recovery from SUDs, and even facilitate prevention. For example, reSET and reSET-O are mobile applications (apps) that deliver cognitive behavioral therapy to people with non-opioid SUDs (reSET) and OUD (reSETO), and were the first ‘digital medicines’ to receive FDA approval for the treatment of addiction.”
• One more thing… Click Therapeutics and Boehringer Ingelheim Pharmaceuticals recently published results from a survey of people with schizophrenia that revealed some more details about what the digital therapeutic the two companies are co-developing might offer. “Patients with schizophrenia reported the survey items that most impacted their daily life were: difficulty meeting new people (17%) and difficulty setting goals/completing activities in daily life and not being productive in their free time (both at 13%). The greatest unmet treatment needs reported by people with schizophrenia were: improving social skills (19%); reducing distress related to disease (19%); and being more productive in their free time (13%). In terms of expectations for what a digital therapeutic would include, the items reported as most important were: sharing progress with providers (13%); teaching ways to deal with symptoms (13%); and helping to set and achieve goals (12%).”

Financial details now revealed: Quest bought Pack Health for $123 million in all-cash deal last year

Back in January 2022, E&O (Issue 134) and others reported the news that Quest Diagnostics had acquired Pack Health. At the time all of the press reports along with the official announcement noted that “financial terms of the transaction were not disclosed.” Now — more than a year later — that’s no longer true. And while they have been disclosed in various Quest SEC filings over the past year, they have remained largely unreported in the press. Read on for a look at how the financial details of the acquisition break down.

(And tune in next week for deeper insights on the deal along with Pack’s origin story, which I learned about after catching up with former Pack Health CEO and founder Mazi Rasulnia.)

Here’s the scoop on Pack Health’s all-cash acquisition price:

The one-year earnout period has come and gone and my understanding is that the Pack team did earn the full amount by hitting the target revenue milestone that Quest set at the time of the deal. Here’s how Quest broke down the rest of the deal:

Quest noted that “the intangible assets consist primarily of customer-related assets which are being amortized over a useful life of 15 years.” The goodwill component of these acquisitions has always puzzled me. It made up the majority of this transaction, as Quest noted above. Here’s how the company explained the goodwill:

More on the rationale for this acquisition, Pack Health’s origin and evolution, along with additional financial details in next week’s newsletter.

Trial updates: Apple, Hinge Health, and Big Health

This is a recurring feature of E&O Fridays that digs into new digital health-related clinical trials as well as updates to others mentioned in previous issues.

New: Hinge Health study to compare the effectiveness of its Enso device vs a standard transcutaneous electrical nerve stimulator (TENS) device

This new Hinge study is actually a three-arm study that compares Enso, an FDA-cleared device that Hinge acquired and which uses high-frequency impulse therapy (HFIT) to a group using TENS devices and a control group using no devices — just Hinge’s coaching program. The randomized control trial aims to enroll 288 and begins this month. Here’s how Hinge described the Enso arm of the study:

New: Big Health’s “Sleepio after cancer” study in Ireland

University College Dublin is sponsoring a study of Big Health’s Sleepio in a population of women cancer survivors (as well as current cancer patients) who also have insomnia. The researchers aim to enroll 308 participants. More on the study here:

Now recruiting: Apple and Johns Hopkins RCT on the Corrie cardiac rehabilitation program

E&O has been tracking this trial for more than a year and it’s now finally recruiting. This RCT is sponsored by Johns Hopkins and Apple along with the American Heart Association are collaborators. The study focuses on the Corrie Cardiac Rehabilitation program which Apple helped Johns Hopkins to develop. More:

New: Canada’s HelpWear is studying how its HealthWatch compares to traditional Holter monitors for ECG monitoring

With this new trial, HelpWear appears to be targeting the remote ECG monitoring market currently dominated by legacy Holter monitors and newer companies like iRhythm. More:

Links to E&O’s reports, databases, newsletters

The Exits & Outcomes site is designed to make it easy 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.
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• Skim more than 200 past issues of E&O newsletters here.