Wednesday, June 23

A look back at the how tech changed the pharma landscape in 2020

The life science world has continued to deepen its interest in the digital space. While the mainstream life science news of the year was research on the coronavirus vaccine, when it came to digital the industries efforts were more varied. We saw new partnerships between pharma and digital health around topics such as respiration health, cardiovascular conditions and real-world data. 

This year we’ve also seen a number of new digital therapeutics on the market. In fact, in April the FDA released new guidance on digital health devices for treating psychiatric disorders that waives several regulatory requirements – such as the need to submit a 510(k) premarket notification – for the duration of the COVID-19 emergency. During this period we saw both Pear Therapeutics and Akili Interactive Labs take advantage of this early release. 

Another major area of interest this year was digital pharmacies. This year we saw GoodRx and Hims go public, signaling more consumer interest in the space.

Read on for a list of highlights of digital pharma initiatives: 

Forging partnerships 

Kicking off the 2020 year, in Europe pharma giant Bayer inked a deal with British biotech firm Exscientia forming a three-year partnership focused on the use of artificial intelligence in cardiovascular and oncology drug discovery. Initially, the companies said they would focus on three early-stage research projects that combine Bayer’s data and drug discovery capabilities with Exscentia’s Centaur Chemis platform. As part of the deal Exscientia could receive up to €240 million.

We also saw action in the respiratory health space. Novartis and respiratory health company Propeller Health, a ResMed subsidiary, have teamed up to co-package the latter’s digital health platform with the pharma giant’s new asthma medication Enerzair Breezhaler. 

Propeller’s sensor is able to attach to the Enerzair Breezhaler inhaler, where it can collect medication data and send that information to a corresponding app. The tool works both as an adherence measure that gives the patient reminders to take their medication, and as a means of collecting information about the patient’s condition.

This wasn’t the only Novartis deal this year. In the Fall, Novartis teamed up with smartpatient to launch a new app feature on the MyTherapy app for patients with wet macular degeneration (AMD) that is focused on educating patients and caregivers about treatment and management. 

Called “See What’s Next,” the section was specifically designed to help provide patients and their families with resources about navigating life with the disease and giving them information about medications and adherence. 

Meanwhile, Roche and its subsidiary Genentech inked a deal with PicnicHealth, a startup that helps patients access and share their medical records in July.

The real-world evidence deal will allow the pharmaceutical companies to have access to PicnicHealth’s set of de-identified patient records in order to gain insights about certain diseases and treatments. Patients must first consent to their records being used before they are part of this research.

All eyes on M&A

We saw quite a bit of space in the pharma and digital M&A space. Pear Therapeutics made moves early on in the year by acquiring technology from a number of companies including a virtual reality company called Firsthand Technology, which created a tool to help distract patients from pain or anxiety.

It made a deal with Cincinnati Children’s Hospital Medical Center to license a digital migraine headache treatment that employs cognitive behavioral therapy (CBT) and patient education.

The digital therapeutics company also licensed the content for a CBT-based digital therapeutic for irritable bowel syndrome from Stockholm, Sweden-based Karolinsak Institute. Additionally it licensed speech-based machine learning tech for cognitive health analysis from Winterlight Labs, and a voice biomarker from NeuroLex Laboratories.

In April Novartis announced the acquisition of Amblyotech, a startup that combines 3D glasses and video game software to treat amblyopia, more commonly known as “lazy eye.”

At the time Novartis also said that it will be developing new games and kicking off a proof-of-concept study alongside major French video game publisher Ubisoft and McGill University later this year.

Walmart acquired digital medication management company CareZone’s tech platform that helps patients with multiple medications keep track of their treatment. CareZone will remain a separate, unrelated company. Some of its employees on the product and tech team will be joining Walmart in order to help integrate the system.

The platform caters to individuals with multiple medications. Patients or family members scan pill bottles and, in turn, the platform can create a list of the medications and share it with medical teams. The tool also has medication reminders.

Dipping into digital therapeutics 

While there was plenty of DTx news in 2020, the story of digital therapeutic Proteus was not a success story. In January Proteus Digital Health revealed that it was winding down its $88 million deal with Otsuka Pharmaceuticals and pivoting from mental disorders to cancers and infectious disease treatments.

This came after news of Proteus’ financial hardships. At that time Otsuka had acquired the full license for Proteus’ mental health treatment and announced that it would be independently pursuing the development of these therapies.

Then in June Proteus Digital Health, maker of an ingestible sensor for tracking medication adherence filed for Chapter 11 bankruptcy protection.

The “smart pill” maker indicated in the filing that it has between $100 million and $500 million in estimated assets, and between $50 million and $100 million in estimated liabilities.

The company also reported between 200 and 999 estimated creditors, top among which were PREI’s Westport Office Park (a $1.04 million unsecured claim), Romanco North America ($510,848), Otsuka America Pharmaceutical ($397,721) and Workday ($288,000).

In August, following the bankruptcy of Proteus Digital Health, business partner and stakeholder Otsuka Pharmaceutical was approved to purchase the digital health company’s assets by a federal bankruptcy court judge.

However, other digital therapeutic companies are growing. In March Pear Therapeutics landed FDA market authorization for Somryst, a prescription digital therapeutic for adults with insomnia.

The treatment provides cognitive behavioral therapy for insomnia (CBTi) alongside personalized, algorithm-generated sleep restriction recommendations. The digital therapeutic was reviewed through the agency’s 510(k) pathway and, notably, is also the first product to pass through the FDA’s experimental Software Precertification Pilot Program.

In April Akili launched its digital therapeutic for children with ADHD. This came after the FDA loosened its regulations for digital health products treating psychiatric conditions during the COVID-19 health crisis.

Known as Endeavor, and flanked by a symptom tracker and a caretaker support line, the video game-like app will be provided at no cost for a limited time to qualifying families with children aged 8 to 12 who have been diagnosed with ADHD. In June the company finally landed the much awaited FDA de novo for the product.

Spotlight on the consumer space 

In November Amazon unveiled that it is building up its foothold in the digital pharmacy space by rolling out Amazon Pharmacy, a new digital shop that lets customers order and manage their prescription medications online and get them delivered at home.

Patients can access the new store via the Amazon App or on a desktop. They can create a profile, which includes information like insurance and prescription management. The tool was designed so that patients could request for their provider to prescribe directly to the Amazon service. 

GoodRx, an online pharmacy platform for low-cost prescriptions and price comparisons, filed SEC documents seeking to go public on Nasdaq in August.

Founded in 2011, GoodRx made its name with a platform and mobile app that lets self-paying customers compare medication prices and discounts. Users can bring a printed or digital coupon to major pharmacies when ordering their prescriptions. The platform also sells ad space. One of the most notable things about this IPO was that the company was profitable before it went public.

In October consumer-friendly telehealth and mail-order wellness product service Hims is officially entering the public markets. It announced a merger agreement with Oaktree Capital Management-sponsored special purpose acquisition company (SPAC) Oaktree Acquisition Corp.

The reverse merger is expected to close in the fourth quarter of 2020, and places the combined entity at a roughly $1.6 billion valuation, according to the companies’ announcement.

The digital pharmacy space has also seen a number of mega fundings this year. For example, virtual pharmacy Medly scored $100 million in Series B funding earlier this year; Alto announced a whopping $250 million Series D round; and Capsule scored $200 million in funding in 2019. Direct-to-consumer telemedicine and digital pharmacy Ro also scored $200 million, bringing its valuation to over $1.5 billion. 

While 2020 was an unusual year for healthcare, it is clear the pharma industry is continuing to tap into digital, a trend we can expect to see more of in the future. 

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