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:
- Sharecare, which WebMD founder Jeff Arnold founded with Dr. Mehmet Oz, Oprah Winfrey’s production company, and a slate of pharma partners back in 2010, just SPAC’d into the public markets: “The transaction implies a Sharecare enterprise value of $3.9 billion, or approximately 9.5x 2021 estimated net revenue.” Anthem also plans to invest between $25 million and $50 million. (Curiously, the SPAC documents don’t mention Dr. Oz. Huh.) Reported revenues show a gradual decline: 2017 – $347 million. 2018 – $342 million. 2019 – $340 million. And 2020 is expected to drop to $330 million.
- Dexcom is setting up a venture fund: “The fund will support independent initiatives in glucose sensing technologies and in adjacent fields of metabolic monitoring and marks the entrance into the venture capital space for parent company Dexcom.”
- Biogen made a big hire this week: John Wilbanks is Biogen’s new head of digital health research platforms, responsible for strategy and execution of large-scale real-world evidence (RWE) networks. Wilbanks previously served as Chief Commons Officers at Sage Bionetworks, a nonprofit biomedical research and technology development organization.
- In late January, the FDA cleared Ava’s Fertility Tracker, a wearable device “intended to measure and display physiological parameters (body temperature, resting pulse rate, heart rate variability, and breathing rate) as an aid in ovulation prediction to facilitate conception (not to be used for contraception),” according to its label.
- Here’s an interesting paper on an FDA-cleared peel-and-stick gut health sensor from a few years back that’s resurfaced as a potential tool to help people know when to stop eating. The researchers call it a “gut speedometer.”
- Meant to mention this one sooner, so in case you missed it, the wireless charging technology that Apple included in its newer iPhones might interfere with people’s pacemakers. So Apple says to be sure to keep the devices away from each other.
- Here’s an interesting one: Medical “tricorder” company Aidar Health quietly secured FDA clearance for its Mouthlab device. (No announcement yet.) “Mouthlab is a non-invasive, hand-held, ‘Rapid Health Assessment’ device that is designed to be used at home. It is cost-effective and as easy to use as a digital thermometer, yet capable of measuring multiple vital health parameters in under 60 seconds. Aidar Analytics is our cloud-based data analytics solution powered by AI and machine learning algorithms to identify, analyze and predict health status and disease progression early enough to intervene and provide appropriate care at home.” That’s from their website. When the FDA clearance summary document is up, I’m curious to see what their intended use language looks like.
- One more thing… Germany’s reimbursement program for prescribable apps, DiGa, still only includes 10 digital health offerings, but 24 more are under evaluation. The program kicked off in October and, according to German media, only 3,660 total prescriptions for these products have been written so far. That’s not a lot — is it?
Akili CEO talks pricing, channel strategy, and bundling care services with PDTs
You probably know that I’ve been helping out a little bit with a podcast that Bayer’s former Global Head of G4A Digital Health, Eugene Borukhovich created. It features interviews with CEOs and founder types at digital therapeutics companies, and the series is really coming along (check out the first seven episodes here).
I especially liked this week’s session with Akili Interactive Lab’s co-founder and CEO Eddie Martucci.
These were some of the highlights of the conversation for me. These were Martucci’s comments on pricing, channel strategy, and bundling care services with digital therapeutics.
Pricing strategy for EndeavorRx
“The pricing strategy is pretty straightforward. We weren’t doing any secret sauce here. Our perspective is, there’s a 10x range of costs of treatments in the system for ADHD and similar conditions. What we looked at are the treatments that are either prescribed or recommended. So pharmaceuticals and behavioral therapy that ADHD patients routinely use for the type of outcomes that we can offer and then we tried to price directly in the middle of that. So we’re pricing it $450 for a three-month prescription or $150 a month is pretty much right down the fairway of what is average on average being paid for in the drug or behavioral therapy space by insurance, health care system, etc. And so that was really our thought is, yes, we think there are some benefits to digital therapeutics that go far beyond what today’s medicine does, but we also know there are some things that today’s medicine does digital therapeutics won’t be able to do.”
Akili’s channel strategy did a 180
“I’ll be honest when I was first planning this, and we were running trials… I was very much in the typical pharma mindset. Right? So I was thinking, okay, well, we’ll have to have a few 100 sales reps, and we’ll be flooding the market and whatever the product is, we’re just going to push it Day One and try to get max and cover the globe. That has changed pretty dramatically for a few reasons.
One, on looking at it deeper, we felt like it was an extremely inefficient strategy from a resource and spend perspective — in the same way pharma many times sees that it’s inefficient, especially given our technology resonates in a way that it doesn’t need a heavy sales push in the same way. The other important piece is, I think we fully have embraced now that our technology, like many other technologies, [and this] relates to the question you asked earlier about iteration, everything about our model can change related to feedback…
So we actually swung nearly 180 degrees in the other direction from a kind of big bang pharma launch, and have, instead, been pursuing these smaller, more targeted tests. We’re seeing live patients come through, live prescriptions come through, full payment cycle, full use cycle. And we’re adapting and iterating … and so for us, that meant, start in a lean way and grow over time.”
How Akili thinks about bundling in care services
“We also have what our business calls, Akili Care, which is humans, support team that can help patients. So we’re deploying in some ways a care model along with our digital therapeutic as a support. I think we will see that a lot more. Now, every company won’t be able to invest in that, right, because in some ways, it doubles your investment from just helping with the product. But I do think that whoever ends up distributing it, whether it’s partnerships, or whether it’s a company like ours alone, I do think you’re going to see more of a convergence there where it’s the duty and the obligation in my mind of digital to make use of the data and the connection and the experience you have with patients. And that lends itself so cleanly to some of these care type platforms. The difference is, I think there’s a lot of value starting with the treatment product so that you understand the direct effect you’re having with the patient and then build around it versus the opposite… ‘We’re going to build a holistic solution, and then somehow back into the treatment,’ that’s just not my general way of thinking. I like to start with the core issue for the patient.”
Listen to the whole episode here.
Pear Therapeutics was almost a DTx-focused fund
This is fast becoming a podcast-heavy issue, but I wanted to share two excerpts from another podcast I listened to this week that featured Pear Therapeutics CEO and co-founder Corey McCann.
Toward the end of the interview, McCann made clear that Pear’s focus right now is making its three current products (reSET, reSET-O, and Somryst) “mainstream medicine”. And he pointed to the next thing that needs to be “de-risked” for Pear’s business is showing that it can sign on more payers:
“What that means for us is we continue to develop data in particular around the cost-saving benefits of using the products. We continue to roll the products out to additional prescribers. And we are very highly focused on working with insurance companies. In my world, that would be called ‘market access’. And so, if we think about identifying the key risk for the business, our key risk at the moment is market access — said differently, it is communicating our market value to insurance companies. That is our near-term goal. The moment we are able to take the risk out of that part of the story, we built the platform that can create hundreds of assets and the success from our initial assets has positive read-through to everything else in the portfolio. It’s quite an exciting time.”
That’s a look into Pear’s hear-and-now, but McCann also shared about its earliest days. I didn’t know the company was almost a fund instead of a startup:
“When we first started looking at this space, we really thought that there was an opportunity to start a fund. So, as we looked at the space, we went out and identified several hundred interesting technologies, but we just didn’t see the management teams that were really poised to bring these technologies with the rigor it takes to ultimately make them mainstream medicine. And so fairly early on, we decided that a fund structure was not the right approach here, but there was an opportunity to really build an aggregator.”
I’d never heard that Pear might have been a fund. The rest of that origin story is featured in E&O’s Pear Therapeutics Report from 2019.
Updates on clinical trials: Bold vs. Headspace, VR to prevent delirium, Sanofi My Dose Coach
Zemedy vs Headspace experiment update: In December’s Issue 081 of E&O Fridays, I pointed out that Bold Health had set-up a clinical trial to pit its digital therapeutic for IBS up against Headspace in an RCT. Well, maybe that caused a little too much attention for that experiment. The study is no longer entitled “Acceptability and Efficacy of Zemedy App Versus Headspace App for IBS”. Now it’s: “Acceptability and Efficacy of Zemedy App Versus Education and Relaxation Training App for IBS”.
A4i schizophrenia self-management: Here’s an interventional trial for App4Independence (A4i), a self-management app for people with schizophrenia developed by Memotext and researchers at the Center for Addiction and Mental Health in Toronto. A4i includes a number of features, but one that jumped out at me helps people figure out if they are hearing things or hallucinating:
“An ambient sound detector with an oscilloscope-type indicator that [helps] individuals with auditory hallucinations separate hallucinations from real sounds.”
VR to prevent ICU delirium: This study at the University of Florida is testing whether a virtual reality-based digital therapeutic can help prevent delirium:
“The purpose of Digital Rehabilitation Environment Augmenting Medical System (D.R.E.A.M.S.) is to research the feasibility and clinical potential of an immersive digital reality-augmenting system in reducing the occurrence of cognitive, behavioral, and emotional consequences of critical illness (e.g. pain, anxiety and insomnia) and environmental exposures (noise & light) that are risk factors for the development of delirium, a common and devastating complication in the intensive care unit (ICU).”
You read more about the technology and its developers here.
Sanofi insulin titration study: Sanofi plans to kick off a 300-person non-randomized trial of its insulin titration coaching offering, My Dose Coach, which includes an app and a connected insulin pen:
“The primary objective of this two-phase study is to demonstrate that patients who are trained on the My Dose Coach app to titrate insulin will have greater improvements in hemoglobin A1c and will be more likely to achieve glycemic control at three months as compared to usual care practice, and those who do attain glycemic goals will be able to maintain glycemic control for an additional six months using the Connected Ecosystem.”
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