Digiceuticals: Can mHealth Give Pharma a Run for its Money?
For the first time since the rise of big pharma, there is a new kind of treatment that could steal some of pharma's market share: digital therapeutics, or so-called "digiceuticals".
Equipped with more available data and less federal oversight, digital therapeutics could be making a run at the pharmaceutical industry’s entrenched role in healthcare.
Digital health startups see an opportunity to replace—or augment—prescription drugs with lower-cost and more effective tech-based solutions, or so-called “digiceuticals,” according to an article in MIT Technology Review. Often, these digital health companies are putting their software through the same rigorous clinical trials as drug companies to demonstrate their value.
This threat to pharma's dominance in healthcare is not just hypothetical.
Several companies have already pushed their way into the healthcare industry with technology that emphasizes data collection and personalized coaching. Earlier this year, Virta launched as a specialty medical clinic with the lofty goal of reversing Type 2 diabetes in 100 million people by 2025. Omada Health has emerged as a leader in the field of digital therapeutics, partnering with systems such as Intermountain Healthcare to identify patients with prediabetes.
And of course, some companies see a better path by partnering with drug companies rather than competing with them.
But what separates app developers from prescription drug manufacturers is the constant flow of data that allows companies to continually evaluate their product—something drugmakers have little incentive to do.
“It’s not in the drug company’s interest because they have already sold the drug,” Peter Hames, CEO of a digital startup called Big Health told MIT Technology Review. “Meanwhile, the insurance companies will say to us, ‘You have the data, so why don’t you just tell us?’”
7 Digital Health Mergers & Acquisitions from 2017 Q1
This week, MobihealthNews came out with its list of 12 notable mergers and acquisitions in digital health during Q1 of 2017. We've got an abridged version below that highlights the 7 with the strongest implications for the 50+ health and caregiving tech market.
While some were bigger and more unexpected than others, [the impressive number of mergers and acquisitions so far this year] all demonstrate a maturing and consolidating space.
Fitbit acquires Vector for $15M
Following on its acquisition of Pebble, and the company's announcement at CES that it would be developing an app store, Fitbit announced another smartwatch acquisition: Vector, a year-old Romanian startup that boasts a smartwatch with a 30-day battery life.
Vector could potentially have a lot to offer Fitbit as it enters the smartwatch business. Like Pebble, Vector has its own app store that developers can build for. The Vector delivers on its 30-day battery life by skimping on other smartwatch features: it eschews the touch screen in favor of side buttons and limits the Bluetooth communication between phone and watch. But it delivers features like activity tracking without having to be charged every night like an Apple Watch. (Read more).
GoodRx and Iodine merge with undisclosed terms
Santa Monica, California-based GoodRx, a digital cost transparency tool specifically for medication, has merged with San Francisco-based Iodine, which offers a similar tool for quality assessment and information on medications. The merger took the place at the end of 2016 but was not publicly announced until this year.
The companies will continue to work out of their respective headquarters and haven't shown any signs of shuttering either brand. The two companies first began collaborating in August 2016, working on a project to incorporate drug-pricing data into Iodine’s existing content. (Read more).
DrFirst acquires VisibilityRx for an undisclosed amount
Rockville, Maryland-based DrFirst, which provides healthcare SaaS offerings ranging from medication management to clinical communications, has acquired clinical trial recruitment provider VisibilityRx.
The aim of the acquisition is to offer VisibilityRx’s patient identification, recruitment and communication capabilities to DrFirst’s 60,000 physician clients. (Read more).
RxWiki and TeleManager merge with undisclosed terms, with new name Digital Pharmacist
Austin, Texas-based RxWiki, which offers a medication encyclopedia written and edited by pharmacists as well as tools to help community pharmacists to communicate with consumers, has merged with TeleManager Technologies, a Newark, New Jersey-based provider of interactive voice response (IVR) and telecommunication technologies for pharmacies.
By combining their assets, the companies are able to offer a wider variety of services to independent pharmacies, including IVR and digital channels for communicating with patients and mobile apps. More
Medfusion acquires NexSched for an undisclosed amount
Patient engagement company Medfusion has acquired NexSched, which makes a patient-facing appointment scheduling tool.
Medfusion started out as a patient portal company in 2000. The company was acquired by Intuit in 2011 and then re-acquired by its original owner in 2013. It added a payment offering in 2015, shortly before a $3 million funding raise. NexSched is an appointment scheduling platform that lets patients access a doctor’s schedule in a limited way and set their own appointments, leading to fewer no-shows and a decreased call volume. (Read more).
GlobalMed acquires TreatMD for an undisclosed amount
Miami-based TreatMD, a telemedicine company that uses a platform approach to connect patients and physicians around the world, has been acquired by site-to-site telemedicine technology group GlobalMed.
GlobalMed has mostly focused on creating hardware and software to enable site-to-site telemedicine within hospitals and health systems, while TreatMD enables direct-to-consumer telemedicine. The acquisition could signal a move for GlobalMed further into the patient-facing telemedicine space. Certainly, GlobalMed is acquiring TreatMD to expand its available services. (Read more).
Digital Pharmacist acquires PocketRx for an undisclosed amount
Digital Pharmacist, the company formed in January from a merger of RxWiki and TeleManager, made its first acquisition at the end of the quarter: An app called PocketRx, made by Shreveport, Louisiana-based software development company Praeses.
PocketRx is an app to help patients manage their prescriptions, and is sold to pharmacy chains including Denver Health Pharmacy, USave Pharmacy and Owen's Healthcare, who in turn offer the app to their customers. This is the same business model Digital Pharmacist uses. The two companies will work to integrate their offerings into one, and existing PocketRx customers will immediately have access to the Digital Pharmacist suite. (Read more).
mHealth App Adoption Indicates Motivation, Does Not Yet Drive Behavior Change
The number of mHealth apps is growing and shows no signs of slowing down. And their adoption has reached the point where researchers can ask: do they work?
mHealth apps have not yet proven effective at creating behavior change – but they do mark a patient’s intent to adopt healthier behaviors, according to a German research team...[whose] study was published in the Journal of Medical Internet Research.
The researchers conducted a population-based survey of 4,144 patients aged 35 or older. The survey measured sociodemographic information, chronic condition presence, health behaviors, quality of life, health literacy, and prior and current use of health IT (i.e. smartphones and mHealth apps).
Results are mixed, showing that use of an mHealth app does correlate with the desire to change behavior but not yet with an actual change in behavior.
There was a modest correlation between mHealth app type and behavior change goals, the researchers observed. Patients using planning, feedback, and monitoring apps usually had plans to improve physical activity. Feedback and monitoring apps also moderately correlated to adherence to clinician advice.
[Yet] despite the plethora of mHealth apps on the market and their widespread use, the researchers did not have enough evidence to conclude that mHealth apps currently drive behavior change in chronic disease patients.
Merely indication motivation to change should not be underestimated, however.
mHealth app use does mark a patient’s decision to make a wellness behavior change, a promising first step in self-management.
The real challenge that the data revealed: demographic chasms in who is using the mHealth apps.
There was a significant chasm between mHealth use and certain demographic factors including age, educational attainment, and health literacy. Thus, mHealth developers must consider unique needs of older patients, those with low health literacy, and those with chronic conditions to make apps both appealing and usable.
“The role of age in the use of health apps highlights that the relevance of new potential ways of supporting health topics is growing in the future. However, app developers should not forget about older people, especially because health issues become increasingly important in later years,” the researchers said.
Transition Care Advances when Tech Solutions Meet Provider Incentives
If you attended AARP's Innovation@50+ LivePitch event last week (see The Longevity Network's wrap here), you likely heard one of the event's judges, Missy Krasner of Box, Inc. (and formerly of an impressive list of health tech roles listed here in her bio)--talking about her own experience as a long-time caregiver for her mother. Care coordination, she said, is so huge. Some days it seems like all she thinks about.
She is not the only one.
John Andrews of Healthcare IT News writes about a recent crucial change whereby insurers, including Medicare, penalize healthcare providers if this care coordination--in particular the post-acute care transition care--does not go as planned and results in an unnecessary hospital readmission. Not surprisingly, many tech companies believe they can help with these transitions and with care coordination in general.
"The big risk for errors is from acute care to where the patient goes next – rehab, home or nursing home," said [Tom Sullivan, MD, chief strategic officer for Rockville, Maryland-based DrFirst]. "Discharge plans are so complex now, but if they aren't followed closely, the patient will get readmitted, and now there are penalties. If you don't get the transition right and the readmission could have been avoided, it will cost the system more money."
"The most common gap between acute and post-acute care is hospital-to-home," said [Nan Hou, RN, managing editor for Los Angeles-based Zynx Health]. "The main problem is communication between the transferring provider and receiving provider – one-third of them don't receive documents from the hospital and only 12 percent to 34 percent of discharge summaries reach the care teams."
As such, many large provider groups have developed their own information technology protocols to enable "providers at each care site to receive, evaluate, monitor, and, yes, nag patients to promote their health and safety".
The collective effort is to produce evidence-based guidelines for transition management, Hou said.
"Effective transition care management has a triple aim – quality of care, patient satisfaction and lower costs," she said. "Evidence-based guidelines can help providers leverage best practices by identifying problematic areas like communication and factors that contribute to the gaps."
Research shows that the place to start reducing readmissions is through tracking and improving patient compliance--particularly with medication.
The easiest care transition is to ensure that patients comply with physician orders – especially for patients with chronic conditions like diabetes, COPD and CHF. With its history in call centers and acquisitions of 30 communications technology companies, Omaha, Nebraska-based West Corp. hopes to provide a continuity that better enables transitions of care.
Patient noncompliance has taken a tremendous financial toll on the pharmaceutical industry, costing drug manufacturers about $637 billion in revenue each year, according to Orlando, Florida-based AssistRx. The nonadherence results in roughly 125,000 preventable deaths and up to 69 percent of medication-related hospital admissions annually.
The AssistRx platform digitizes specialty drug management, resulting in no treatment delays and much lower abandonment rates for two drugs they studied, company officials said.
Home caregivers, both paid and unpaid, are also a crucial piece of the care transition team, as are family members and loved ones who may not be physically near to the patient but are still big stakeholders in how the transition goes. (For several examples, read through this year's Caregiving Health Tech LivePitch finalists!)
Non-clinical caregivers in the home are a constant and necessary presence for elderly and disabled patients who need help dressing, bathing and with other daily activities. Through a subscription service, Tulsa, Oklahoma-based Safe Homecare gives remote monitoring capabilities to family members who are separated by geography to ensure that their loved ones are being cared for properly, said COO Adam Krueger.
Overall, Missy Krasner was right. We are still not there yet with care coordination and transition support, which means a lot of family members spend countless hours trying to keep track of and coordinate the details of a loved one's care.
[T]he healthcare industry's progress toward a seamless transition of care is "slower than we would like, but there is progress," Sullivan said.
“Appropriate transition of care really does require a change in workflow and mindsets among clinicians and stakeholders. Patients themselves are also responsible because they are not used to looking at their portals and medical records."
Because it is emblematic of the past, Sullivan and Hou dislike the term "discharge" and suggest it be retired in favor of "transition."
Discharge planners could be retitled "transition coaches" or "care coordinators," they said.
The Longevity Network’s LivePitch Wrap
Day 1 of AARP’s Innovation@50+ wrapped up yesterday afternoon when the Judge’s Choice and Audience Choice Awards for best Caregiving Healthcare Tech companies were named! If you want to watch the full competition with fast pitches and questions from the judges, check out our videos below.
Round 1 of the pitch competition:
Round 2 and the winners' annoucement:
Here’s a quick wrap on each of the pitches and the questions judges and audience members posed to the entrepreneurs, starting with the two winners.
Winner of the 2017 Judge’s Choice Award: GoGoGrandparent
Justin Boogaard, co-founder of GoGoGrandparent, tells the audience that existing on-demand transportation services like Uber or Lyft would be perfect for older adults, except for two major problems: 1) 70% of users over 65 don’t have a smart phone, which is a prerequisite for using them 2) aging leads to certain kinds of slowing down, which means older users would miss certain changes and problems with using those prevalent transportation providers. GoGoGrandparent solves both these issues by coordinating access to their services using landline call-ins and by tracking and verifying all those changes that an older adult might miss—meaning that up to 25% of their users end up speaking to a real person on the other end of the GoGoGrandparent line.
An AARP member of the audience asked how the company planned to control for older adults having more and more access to smartphones. Answer: There are two major problems their app solves—one is access and it’s true that one is changing. But the other is declining capability of the elderly to adapt to unforeseen changes, such as a driver canceling a ride on Uber. And that will continue to be a need, said Boogaard “until we solve aging”).
Winner of the 2017 Audience Choice Award: Siren Care
Ran Ma, co founder and CEO of Siren Care, told listeners that their mission is to create smart textiles to empower people. Their first product is a smart sock to help diabetics prevent ulcers and amputation. If Siren Care is right, “the only wearables you need are the clothes you wear everyday.” They started with a product for diabetics because there are over 400 people living with it, and because missing an injury leads to loss of independence and rising healthcare costs. The sensors are integrated into the fabric of the sock and the data is sent directly to the Siren app.
Judges asked about market differentiation. Answer: Many current socks for diabetics are compression socks, which only prevent edema. But research shows that only temperature monitoring reduces foot ulcers, and all other temperature sensors require behavior changes by the user, for example, using a thermometer to take the temperature of each individual foot and record readings throughout the day.
Aegle Palette’s CEO and co-founder Yulin Li told the audience that their patented digital placemats use weights to determine and record nutritional info of meals for diabetics. Palette 1.0 captures primary data, like activity and stress levels, and correlates it with biomarkers, like blood glucose levels. This data is all stored in the Palette Vault, which is accessible to the medical team continuously. Palette 2.0 then analyzes that data and provides personalized recommendations to the patient, making it a B2B2C platform.
The judges wanted to know more about how the hardware in the placemat works. Answer: Through photo recognition of food items and a scale to determine quantity of nutrients, calories, etc.).
AgeWell’s CEO and Founder Mitch Besser opened with a quote from the US surgeon general from 2016: “isolation is the greatest health crisis facing America”. Their solution? Employ able seniors to travel around their communities checking on less able seniors in their homes. Empowered with only a smartphone and a simple set of screening questions, these able seniors—known as AgeWells—can “be the eyes and ears of the healthcare system” to reduce hospital readmissions, ER visits and the need for institutionalized care.
Judges asked for specifics on what kind of information the AgeWells are collecting through the app. Answer: Behavioral data like whether they are falling or sleeping, or information about whether they have all their meds and food in the fridge.)
BrainCheck’s COO, Wendy Fong, said it is the first evidence-based, self-administered test for measuring brain function. The company has already secured designation as a class 2 medical device and their “Sport” version has already been adopted by many schools and athletic teams to monitor head injuries for signs of concussion. They are hoping to “replicate the success of BrainCheck Sport in the memory market” by targeting mainly older adults and their caregivers.
Judges wanted to know what kind of tests are the current standard of care to assess memory and cognition in this population. Answer: There is typically a 6-8 month wait to see a specialist. In senior living centers where they use a pencil-and-paper screener, tests take 2+ hours and provide only a raw score without specifying memory vs. cognition scores.
CEO Dirk Soenksen of Ceresti Health says their target users are the unpaid caregivers for patients with Alzheimer’s Disease and Other Dementias (ADOD), stroke, and traumatic brain injury. This enormous market of patients, he says, are “unable to self-manage” because they can’t communicate or track their own behavior, medication, etc. Ceresti’s proprietary 12-week program proposes to solve a large part of this problem delivered as a tech-enabled solution for these unpaid caregivers that provides Education, Care Plans, Support, and Coaching
An AARP member of the audience posed a great question to Soenksen, wondering whether they were aiming to replace paid caregivers. Answer: Not necessarily. Their main target users are family members already providing unpaid care and who often cannot afford paid care. Cost savings come not from replacing paid caregivers but from reduced hospitalizations and ER visits.
iBeat’s founder and CEO, Ryan Howard says they offer two emergency response products. The $249 iBeat Watch which has a button on the watch which acts like a life alert as well as proprietary cardiac sensors monitoring function for emergency incidents. Cellular connectivity is included. Second, it includes the free Heart Hero mobile app that teaches you CPR and tests your proficiency. As part of the Heart Hero network, you will be notified if someone is having a heart incident nearby, so you can be the good Samaritan by either providing CPR or locating the nearest defibrillators whose locations are provided by the app.
A savvy audience member in the audience asked whether there would be a way the watch could predict a heart incident and not simply react to one. Answer: The watch cannot yet provide this incredibly valuable service but it is already collecting large amounts of data about this population and it is the vision to utilize that data to add predictive capability to the watch.
Co-founder of Kinto, Jeet Singh, explains that Kinto is an app to help manage communications and coordinate care among family, paid caregivers, and the medical team. It also aims to provide caregivers with a community of support and practical tools to help them deal with their caregiving responsibilities, including financial planning, cost tracking, home care coordination, and safety and insurance recommendations. It is set up to provide the service direct to consumers or to large employers looking to provide valuable benefits to their many employees who provide unpaid caregiving to family members.
Judges inquired about their market differentiation in what is an increasingly crowded marketplace. Answer: Most of the competitors are provider-focused whereas Kinto begins with caregiver needs –many of which are not medical.
Heidi Culbertson, CEO and founder, said Marvee provides a centralized portal for voice-activated caregiving solutions. It is currently integrated as a series of “skills” for Amazon’s Echo but is designed to be platform-agnostic so it could eventually integrate with any number of voice-activated home devices. Today, they have several services in market, including 1) “I’m ok” alerts; 2) engagement services like family news that Marvee can deliver when asked; 3) b2b services like turning paper into voice for answering ‘everyday questions’ in a senior living facility, where many residents cannot read paper handouts about what’s for lunch or what time today’s
An audience member asked for hard evidence on seniors’ willingness to adopt voice interface, given that voice-activated devices still malfunction. Answer: In the beta phase of testing Marvee, they saw a dramatic increase in usage at the 30-day mark, which shows the seniors were understanding the interface. They credit this adoption success at least in part to their “try this today” feature—which sends out, for example, a song from the era in which the user grew up. This feature builds an emotional connection to Marvee and improves adoption.
PillDrill, says Founder and CEO Peter Havas, simplifies and modernizing medication taking. Specifically, it does 3 things: 1) reminds you to take meds 2) tracks what you take through a quick bottle scan; 3) notifies family members / care givers of medication adherence. Its strengths are simplicity because it doesn’t require a smart phone, flexibility because you can program it for any regimen of medication adherence, and dignity because “in order for a product to become part of a person’s life, it cannot just be needed; it has to be loved.”
After learning the device costs $199 with no additional monthly subscription, judges were curious how they had reached this particular price point. Answer: Research about this kind of device shows that it needs to be to be over $100 in order for users to trust it but less than $200 in order to be accessible to the largest number of users.
AARP’s CEO Jo Ann Jenkins Addresses LivePitch Audience
When LivePitch emcee Lisa Suennen, Senior Managing Director of GE Ventures, took the stage this morning, she framed the day's conversation, saying, “As baby boomers age, we will challenge nearly every part of our economy.”
At the beginning of her keynote address to the LivePitch audience, AARP CEO Jo Ann Jenkins said that a 10-year-old child today has a 50% chance of living to 104. And that number will continue to rise. “This new longevity is one of the greatest human achievements of our time,” she said, but our social attitudes and institutions have not yet caught up to the new realities of living longer lives.
AARP—and particularly this annual LivePitch competition—has one purpose in mind, says Jenkins: to empower people to choose how they live and age by providing resources and opportunities to match their longer life spans.
HEALTH, WEALTH AND SELF
Genetics accounts for only 25% of our expected life span, Jenkins reported, meaning our health has more to do with the choices we make each day than it does with our occasional visits to the doctor’s office.
This also means that our innovators have an opportunity to address the other 75%, to help older adults make smarter, healthier choices and live longer, more independent lives. But research AARP has done shows that people deal with issues related to health, wealth and self all at once, not in silos. So they don’t want solutions that put them in silos either.
Innovators are answering the call, says Jenkins. because "innovation is the engine for disrupting [our outdated views on] aging.”
Moreover, she told the audience, it is a myth that aging adults are resistant to technology as a solution to their needs. They are in fact seeking those solutions. They just need them to be simple and intuitive to use.
The challenge to all of us is to take advantage of all the information and research on living well and turn it into solutions that people want, whether those people need care or are providing that care.
FIRESIDE CHAT WITH LISA SUENNEN
The most shocking fact I have, said Jenkins, is that on average, adults are now more likely to spend more time and resources caring for an older family member than they did caring for their kids. It’s a bipartisan issue—because nearly every lawmaker has a caregiving story.
At AARP, she added, we are asking, how do we care for the caregiver?
Jo Ann Jenkins herself just lost her father two weeks ago and recently experienced what it's like to coordinate care, along with her sister, long distance. When asked whether she learned anything in taking care of her own father that informs in a new way what she was already talking about everyday, she reported that near the end of her father's life, she learned he had decided to change his healthcare plan. This plan ended up not being adequate for his needs, and it was a decision was reached in conversation with his doctor, without any of the family's knowledge.
So when Jo Ann returned to AARP, that experience triggered a conversation about investigating how difficult it is to choose an adequate health plan—and how AARP could play a role in advocating for simplifying those choices and also starting a conversation about who has decision-making power.
How Sherpaa Went from VC-Funded Rising Star to Almost Bust to Self-Funded
Last week, we posted a piece on how many digital health startups fizzle out and die before they have time to get traction in the market. These failures are often precipitated by a mismatch between the expectations of investors and what is realistic in the heavily regulated healthcare industry and its notoriously long sales cycles. Because so many VCs are accustomed to the sales cycle and adoption rate of consumer tech products, they simply do not understand the challenges and timeline for digital health startups.
Recently, a notable exception to this fizzle-out model--Sherpaa --sat down with Fast Company and revealed some insight into how they did it: how they went from rising star to the brink of collapse and then was brought back to life as a self-funded company, a transformation that founder Jay Parkinson calls "a gift".
First, there were the glory days:
Through Sherpaa, employees at companies like Tumblr were given an email address and phone number, which they could use to reach a doctor at any time. After a segment aired on national television in 2012 about the company’s simple but effective approach, Parkinson says Sherpaa was able to hire its first seasoned corporate executive. Less than six months later, Parkinson brought on another New York-based senior executive with human resources experience, and raised $1.85 million. Everything was going well.
Sherpaa's launch, full of hype and promise, is not an uncommon story for digital health startups in recent years. Yet the number of successful exits have not kept up with expectations, given the enormous number of investment dollars.
Funding in health technology, known as “digital health,” had reached $4 billion by 2014, a milestone that venture fund Rock Health referred to as “staggering in many contexts.”
Five years after the funding explosion in digital health, “We still have barely seen any successful exits in the [health-tech] space, with most of the category makers, such as ZocDoc and Oscar Health, still private,” explains Nikhil Krishnan, a technology analyst with the research firm CB Insights.
Sherpaa, too, fell victim to the unrealistically high expectations of investors, but Parkinson takes on some of the blame.
Parkinson didn’t set up any meetings with investors who had traditional health care experience. Instead, he sought out investors with consumer technology backgrounds based on a hunch that “we needed folks outside health care to help us change it for the better.” That proved to be his first big mistake.
Looking back, he takes responsibility for “failing to sufficiently educate” his investors about the challenges of innovating in health care, a notoriously complex and highly regulated space.
As Sherpaa investor Bryce Roberts tells me, health startups that raised funds at an “internet company valuation” were often expected to grow at an “internet company pace.”
From the beginning, Parkinson butt heads with the company’s investors over growth expectations. A lot of the tension, he says, was centered around sales. As Parkinson soon learned, many employers’ HR teams were (and still are) reluctant to spend more on health care, with costs steadily rising and dozens of vendors competing for their attention. Parkinson says Sherpaa was growing, particularly among “young, hip companies,” but it wasn’t fast enough to satisfy the investors and the board.
After 18 months or so, the company has failed to reach the “inflection point” necessary to secure an additional infusion of cash. “They can’t go to the outside market to raise money, so they are relying on their insiders to double down.”
Experts offer several different avenues to avoid this all-too-common mismatch in expectations.
[Should] health-tech companies avoid taking checks altogether from inexperienced venture investors? Not necessarily, according to Parkinson and others.
Some experts say that startups will be better off if they favor venture capital firms with health experts on the team. Gupta from Quartet Health took Google Ventures’ funding for that reason (his investor Krishna Yeshwant is a physician and entrepreneur who still practices medicine). Others say that any form of capital is a risk, so the best that an entrepreneur can do is educate their investors before they sign on the dotted line.
Roberts’s firm, Indie.VC, makes investments in a different way than the traditional venture model, by taking payment through cash distributions or a portion of revenues. “We think there’s plenty of opportunity to make really great returns on real businesses that don’t follow Google-shaped timelines,” he explains. Roberts believes that venture capital has been overly glamorized, with the startup ecosystem too quick to “peg ambition to venture dollars raised.”
Ultimately, Sherpaa leveraged its impending collapse to gain something precious: independence.
Parkinson has ultimately learned that the key to a meaningful business is independence. He claims that the investors on the board tried to shut the company down to write off the investment and avoid any personal liability. Ultimately, the investors presented him with a one-page document that released them of all liability; in exchange, they’d resign from the board and terminate any voting rights. The entire board signed it, Parkinson says.
Now, he has a smaller team that primarily sustains itself on revenues and is slowly paying off the company’s venture debt. “We’ll only invest in things that contribute to delighting our customers and, therefore, grow our revenue,” he says. “While it’s uncomfortable to go from a VC-funded to self-funded company, I feel like it’s a gift.”
In-Home Caregiving Startup Homage Lands $1.2M in Seed Funding
The Singapore-based company moved beyond angel investing to secure funding for further development of its platform as well as expansion of its team.
[The] $1.2 million [of] seed round [funding comes from] venture capital firms...Golden Gate Ventures, 500 Startups, and SeedPlus.
[Homage is] the brainchild of Y-Combinator Alumni Gillian Tee, Lily Phang, and Tong Duong, [and] aims to “fundamentally” change home-based caregiving for the elderly....[by making] the process quick, effective and affordable.
The shortage of quality caregivers is even more acute in Singapore and Asia so the founders hope to establish their proof of concept in this burgeoning market.
[F]amilies struggle to find in-home solutions they can trust. The process is time-consuming, costly, and most of all, deeply stressful.
Homage will invest the capital to fuel product development and scale operations to fulfill the rising local demand....The platform also serves as an enabler for micro-entrepreneurship, as it offers specialized training for both aspiring and experienced care professionals. The professionals are then hand-picked to work and provide services through Homage.
This way, the founding team, believes they will be contributing their bit in creating opportunities for individuals who are looking for a rewarding career with a flexible work schedule.
The company claims to have delivered more than 10,000 hours of caregiving services.
Breg Enters the Increasingly Crowded Virtual Rehab Field
With providers moving toward bundled payments and "value-based system" in healthcare, costly post-surgical services like physical therapy are finding themselves on the chopping block. One consequence is an accelerated move toward virtual rehabilitation. And companies like Breg who have developing products to enable this remote care are set to capitalize on their foresight.
“We are actively moving toward online physical therapy programs and our goal is to eliminate physical therapy for hips, only use in knees when we need it …,” said Richard Iorio, a hip and knee surgeon at NYU Langone Medical Center, at a panel discussion on orthopedic bundled payments last week at AAOS.
At the recently-concluded annual meeting of the American Academy of Orthpaedic Surgeons (AAOS), Breg executives were showing off a new sensor-device [called Flex] connected to a mobile app that can guide patients through their daily exercise routine following orthopedic surgery.
This is the first time the company has forayed into the digital health, Internet of Things space, confirmed Brad Lee, president and CEO, in a booth interview [with MedCity News] last week where demos of the Breg Flex system were being presented.
Breg's Flex is certainly not the only virtual rehab provider in the space. Differentiators among them are what device they require (smartphone vs. console), whether they offer clinical decision support and therefore require FDA clearance and how well they integrate with electronic health records.
[Flex includes a] chargeable Bluetooth wireless sensor, worn by patients to track progress with prescribed PT exercises with a companion mobile app.
The sensor and app work in concert to record range-of-motion that is key to better clinical outcomes. The data is also shared in real time with providers such that clinicians can tweak exercise protocols. The interactive patient app has a virtual avatar that guides patients through exercises. The system can also collect patient-reported outcomes that are key to getting reimbursed for certain orthopedic procedures such as joint replacement under bundled care programs.
...Flex also works with the electronic medical record of a practice or a hospital [and] is FDA-exempt because it simply monitors and tracks and does not offer clinical decision support.
Competitors include Reflexion Health's Vera and RespondWell, recently acquired by Zimmer-Biomet, an Indiana-based company that currently holds the largest market share of hip and knee replacements.
Reflexion Health’s Vera virtual rehab program...uses the Microsoft Kinect gaming console and the Vera avatar to guide patients through their at-home exercise regimen. The system received FDA clearance in 2015.
....RespondWell virtual rehab program...is...not FDA-cleared.
...Jintronics and Reflexion Health use the Kinect platform thereby tying joint replacement patients to a console or a TV to do their daily rehab. All Breg Flex needs is a cell phone, or tablet and a sensor-device. In other words, patients can be out and about, and still get their rehab done.
[T]he virtual rehab space is getting crowded with several companies vying to win. But Breg’s CEO shrugged it off. “There is a huge market and there will be a lot of good players in the space,” he said.
Photo: Breg Inc.
Gates Foundation Vets Raise $200M for New Biotech and Digital Health Fund
There’s a newcomer to the digital health and biotech investment worlds. The two founders of Biomatics Capital come with a strong pedigree, having worked for the Bill & Melinda Gates Foundation.
Boris Nikolic and Julie Sunderland, who (respectively) were the chief adviser for science and technology to Bill Gates at the Foundation and the director of programming investments, picked up $200 million for the venture fund that they formed last year.
With one company already on its roster, the venture firm hopes to add 15-20 more in the near future.
Biomatics will boost firms in the big data-driven digital health and genomics space. It's already invested in AiCure, a company that uses smartphones to see whether or not patients are taking their medications. "It's our goal to seek out radically innovative solutions—the outliers," said Sunderland in a statement.
The outfit plans to pour about $5 million to $10 million in initial funding into 15 or 20 companies (that figure could rise to $20 million for particularly promising firms).