Issue 043.

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Digital health research from Brian Dolan.

Welcome to E&O.

Last week’s newsletter had a 62 percent open rate. Here’s what’s happening this week:

• Once again you’re looking at a COVID–19-free newsletter. That will be the only mention of it here. There’s plenty of other things to read and think about so let’s get right onto it…
• Regrets, I’ve had a few: Last week I dashed off a headline for the Livongo year-in-review piece and flubbed the company’s year-over-year multiple. Livongo’s revenues grew 2.5x between 2018 and 2019, not 1.5x as I wrote in the headline. All of the other information in the article was correct. Apologies for the mistake and thanks to the reader who pointed it out. Eager to hear when I’m wrong, so please don’t hesitate to tell me.
• Speaking of righted wrongs, BCG’s white paper on digital therapeutics that I mentioned last week did, in fact, have an error where it claimed Omada raked in $250 million in revenues last year. The authors revised it by simply deleting the reference to Omada.
• Typically, I don’t cover funding rounds here but this one is huge. The founder of iRhythm just raised $145.6 million for his new digital health startup, Element Science, which is developing the “Jewel Patch Wearable Cardioverter Defibrillator (P-WCD), an unobtrusive, low-profile personal defibrillator designed to detect and treat life-threatening arrhythmias in patients with an elevated temporary risk of Sudden Cardiac Death (SCD).”
• Ipsen is hiring for a digital product owner in Cambridge, MA, and the job posting frames out how the biopharma is thinking about digital products at a high-level right now: “Ipsen’s Global Digital group leverages digital technologies to develop innovative therapies and bring differentiated life-changing solutions to patients suffering from rare conditions. Within this group, the Digital Health team focuses on Commercial innovation – ‘Beyond the Drug’ solutions that accelerate patient diagnosis, enhance the value of our products, and provide a better experience for patients and HCPs.”
• A review published in BMC’s Medical Ethics journal looked at past studies focused on digital pills (DP), like those developed by Proteus Digital Health and etectRx. The researchers found 18 papers and concluded: “The first important finding is that published studies are quite diverse in their design, but are predominantly explorative, non-randomised and with small numbers of participants. This suggests that the evidence publicly available concerning DP is not robust.”
• Financial analyst firm, The Edison Group, published a research note focused on Swedish biopharma Orexo’s recent FDA submission announcement. Orexo recently disclosed it was sending its digital therapeutic for alcohol use disorder to the FDA. I mentioned this last week, but didn’t know Orexo had filed a 513(g) with the FDA, which basically is a way of asking (in writing) how the agency wants to regulate a particular device. Clearly, regulatory pathways are still unclear for DTx companies.
• Welldoc is partnering with Dexcom. That makes it the latest diabetes management company to announce a partnership with a continuous glucose meter (CGM) maker. It might be easier to tally up Type II diabetes management companies without a CGM partner at this point.
• Finally, I’ve written a few times about Magic Leap, the much-hyped augmented reality company down in Florida. In recent years the company has hired digital therapeutics product leads and some reports indicated the company was going all-in on these health applications. In any case, after raising about $2 billion, Magic Leap is now hoping for a buyer, according to Bloomberg.

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A preview of future digital therapeutics thanks to trademark filings: Happify, Mahana, Resmed

One of the more reliable ways to preview products that have yet to be announced, let alone hit the market, is to comb through the USPTO’s trademark database. I’ve rounded up the potential names and therapeutic areas of various digital therapeutics that are likely to come to market in the coming years.

First, a word of warning: Companies file trademarks for products or features they don’t end up using all the time. Omada Health, for example, abandoned a trademark on a stylized version of the word “predicts” that looked like: Pred!cts — back in December. Omada has also casually referred to the potential users of its prediabetes program and other preventive programs as a “Tipping Point Population”. It abandoned that trademark in 2018.

Happify trademarks “Kopa”: Eight days ago Happify trademarked the word “Kopa”, which it describes as software for accessing and sharing information “related to the treatment, prevention, and management of diseases, conditions, and disorders.” Happify Health is working closely with Sanofi on DTx products for MS patients. Anxiety and depression are two comorbidities the partners have mentioned as likely TAs. So, good chance Happify’s first DTx is called Kopa.

Mahana Therapeutics trademarks “Parallel” and “Vitalogi”: JAZZ Venture Partners portfolio company, Mahana has trademarked both Parallel and Vitalogi. In its filing for Parallel the company describes “software for treating, monitoring, reporting on, and analyzing the use of therapeutics and pharmaceuticals in the fields of autoimmune and gastrointestinal conditions, diseases, or disorders.” The filing for Vitalogi is more generic, which suggests it may be the name of an underlying technology platform.

ResMed trademarks “MitiGait”: Yes, that’s a pun. Surprised to find this trademark from ResMed, which is focused on sleep conditions like sleep apnea as well as respiratory conditions like asthma and COPD, via its Propeller Health acquisition. MitiGait looks to be an as-yet-undisclosed new vertical for ResMed that will take it into aging in place technologies:

Moderna Therapeutics: I was surprised to find this Cambridge, MA-based biopharma company has applied to trademark the general term “digital therapeutics” as of May 2018. This doesn’t look like a sign the company is pursuing DTx, however. Moderna is not using the term like everyone else. It writes the mark would not apply to “the use of digital technology designed to affect behavior or lifestyle changes or the use of digital technology to monitor dosing compliance or improve health outcomes.”

Click Therapeutics trademarks “Digital Functional Cure”: Click has also filed for various trademarks on the general term “digital therapeutics” over the years — starting in 2012 — but has since abandoned them all. Last month, however, Click filed for trademarks on both “Digital Functional Cure” and “Digital Cure”. I imagine these won’t be the names of products but rather a new way of describing Click’s offerings in general.

What Verily paid Sanofi for 30.1 percent of Onduo

At the end of 2019, Sanofi announced that it would decrease its stake in Onduo, the diabetes joint venture it has with Google’s Verily. This week Sanofi’s year-end financial documents show that the company decreased its 50 percent stake in Onduo to 19.9 percent.

As part of the restructuring of Onduo, Verily paid Sanofi a dividend in Dexcom stock. Sanofi said in its 20-F filing that the stock was worth $122 million on November 11, 2019, the day it received it. By the end of the year, the stock had a carrying value of $104 million.

In its 20-F, Sanofi wrote:

Given Sanofi’s minority stake, which is now below the 20 percent threshold, I’d be surprised if they share any more details about its performance in future SEC filings.

Initial lineup for the CVS digital health formulary

CVS Health added a number of new digital health companies to its version of a Digital Health Formulary. When it first announced plans for this back in June, CVS called it a “Vendor Benefit Management” service for its PBM clients that would include digital and non-digital health offerings. It also announced that Big Health’s Sleepio would be the first one in the hopper.

Well, no one likes being called a “vendor”. This week CVS rebranded the new channel as “Point Solutions Management”, which is marginally better, I guess? Who wants to be referred to as a “point solution”? That’s “platform company” propaganda!

Express Scripts may have the right idea with its much more ambitious-sounding Digital Health Formulary.

The new point solutions in CVS Health’s formulary are: Hello Heart, Hinge Health, Livongo, Torchlight, and Whil. With Sleepio, the total comes to six. This page over at the CVS Health site digs into the selection process and ongoing requirements for the companies in the program. Notably, CVS claims the companies are obligated to offer CVS PBM clients their “most competitive pricing” as part of the deal.

Quick links to E&O research reports

The links below aim to make it easier for paying subscribers to find the long-form research reports on the E&O site:

The Digital Health Enrollment Report (Subscribers-only Link)
The Omada Health Report (Subscribers-only Link)
The Google Health Report (Subscribers-only Link)
The Pear Therapeutics Report (Subscribers-only Link)
The AliveCor Report (Subscribers-only Link)
Apple’s Healthcare Work Experience (Subscribers-only Link)
Approximating Livongo’s S-1 (Subscribers-only Link)

That’s about enough out of Issue 043 of Exits & Outcomes.