Digital Health Newsletter & Insights

DeciBio’s Weekly Digital Health Digest

Subscribe to our weekly Digital Health Digest to receive our latest insights directly to your inbox. Each issue of our digest profiles 3 key stories of the week with deep-dive commentary on broader implications for the industry, as well as M&A and funding activity. See our archive of past issues and connect with our digital health team below:

 

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Chris focuses on digital diagnostic, therapeutic, and remote patient monitoring technologies and their impact on personalized medicine and population health. Chris has led market analysis and strategy engagements across the diagnostics and health tech spaces. Connect with him on LinkedIn or reach out at [email protected]

 

Fanny Anderson is a Senior Associate at DeciBio, with experience in strategy development across the healthcare IT space, including clinical decision support, real-world evidence and digital health. Connect with her on LinkedIn to learn more about her expertise in health technology consulting.

Digital health newsletter

  • Vol. 46 (1/20/2021) — New FDA AI/ML Guidance | Best of CES 2021

    DeciBio’s FDA SaMD Reg Framework for Dummies: FDA’s action plan for regulating AI/ML-based SaMD medical devices

    TLDR: In April 2019, FDA published its “Proposed Regulatory Framework” for a total product lifecycle (TPLC) approach to regulating AI/ML-based Software as a Medical Device (AI/ML-SaMD). Last week, FDA released a 5-pronged action plan for furthering progress on this framework in 2021:

    • Tailored Regulatory Framework for AI/ML-based SaMD: Release draft guidance in 2021 that specifies the types of modifications permissible / relevant under this framework, specific elements for inclusion in an SPS / ACP, and preliminary guidance on the submission and review process.
    • Good Machine Learning Practice (GMLP): Drive consensus AI/ML best practices (e.g., data management, feature extraction, training, interpretability, evaluation and documentation, cybersecurity), drawing from diverse set of cross-industry and international organizations: Drive consensus AI/ML best practices (e.g., data management, feature extraction, training, interpretability, evaluation and documentation, cybersecurity), drawing from diverse set of cross-industry and international organizations
    • Patient-Centered Approach Incorporating Transparency to Users: Continue to leverage Patient Engagement Advisory Committee (PEAC) and ongoing patient and patient advocacy group feedback to drive standards and recommendations for patient-centered device labeling
    • Regulatory Science Methods Related to Algorithm Bias & Robustness: Continue investing in CERSI research with plans to share findings with the KOL and patient community
    • Real-World Performance (RWP): Leverage existing FDA infrastructure for real-world data (RWD) guidance and external stakeholder feedback to define key RWP parameters, thresholds, frequency and depth of oversight, validation of the SaMD’s claims, and incorporation of user feedback into iterative development.

    So what? SaMD manufacturers have long criticized the FDA’s traditional regulatory framework as “misfitted-for-purpose” and antagonistic to innovation. AI/ML-SaMD’s unique ability to learn and improve as more data is fed through it merits a novel — agile, TPLC-based — approach to regulation that primarily clears an organization’s infrastructure and change management plan rather than the SaMD itself as a finished product. While FDA’s venture into uncharted territory is likely to come with some choppy waters and detours, this action plan marks a deviation from healthcare’s oft-criticized resistance to change and a welcomed application of broader technology principles (e.g., agile development, human-centered design) to healthcare innovation.

    Digital Biomarkers Steal the Show @ CES 2021: 432 companies showcase digital health solutions at CES 2021

    TLDR: Amid the sea of tech launches at CES 2021, sensors, wearables, and SaMD enabling remote patient monitoring stole the show. We’ve picked out a few that caught our eye (links to device details below):

    • Valencell —  wearables-embeddable sensor for continuous, cuffless blood pressure monitoring
    • Leman Microdevices —  smartphone-integrated finger sensor for discrete blood pressure readings
    • NuraLogix — contactless 30-sec. (discrete) blood pressure readings by measuring blood flow through light-based skin imaging through its Anura smartphone ap
    • Biospectal — similar to NuraLogix Anura; smartphone camera-based blood pressure monitoring without any specialized dongle / smartphone modification
    • iMediSync — portable EEG helmet (iSyncWave) with paired app aiming to address early detection and remote therapy for neuropsychiatric disorders
    • Philips — wearable biosensor (BX100) for ICU teams to remotely monitor key patient vitals
    • Quantum Operation — first-in-class needle-less continuous glucose monitor (CGM) that measures blood via skin-worn sensor

    So what? While launches of new remote patient monitoring (RPM) and digital diagnostic technologies at CES is by no means a first,  “forced” utilization by clinicians and patients attempting to minimize in-person care during the pandemic has dramatically accelerated their adoption. More broadly, COVID has accelerated and (to a relatively limited extent) validated the clinical use of digital biomarkers. Last year’s $18.5B Teladoc-Livongo merger exemplifies this trend — Teladoc’s virtual visit platform paired with Livongo’s IoT of wearables, sensors, and RPM tools positions “Teladongo” to create a closed-loop ecosystem that leverages passive, longitudinal digital biomarker data to inform routine clinical care. While the pandemic’s urgency has most notably catalyzed digital biomarker use for RPM, we expect early disease detection and real-time treatment selection / optimization applications to follow close behind.

    On the heels of disappointing schizophrenia trial readout,
    Pear Therapeutics inks deal with digital pill company etectRx

    TLDR: Last week, Novartis read out results from its trial evaluating efficacy of Pear Therapeutics’ PEAR-004 DTx as an adjunct to pharmacotherapy for N=112 schizophrenia patients (NCT03751280). Despite high patient engagement rates with the DTx, the readout showed no statistically significant difference for any primary or secondary outcome measures — e.g., reduced severity of schizophrenia symptoms. This week, Pear has announced a partnership with etectRx — a Proteus-esque company who has developed a digital pill and paired sensor for monitoring medication adherence.

    So what? Pear’s unfavorable PEAR-004 readouts are first for digital health — and perhaps healthcare at-large. In April of last year, Pear commercialized PEAR-004 under the FDA’s temporary 510(k) exemption for digital cognitive behavioral therapies (iCBT). While PEAR-004’s readout is no cause for alarm (the DTx still shows no safety risk or adverse effects on outcomes), its readout marks the first significant setback for Pear after a string of splashy headlines. To make matters more awkward, the Pear-Novartis PEAR-004 partnership marks the second joint disappointment for the two (recall their high-profile “break-up” over co-commercializing Pear’s flagship reSET and reSET-O DTx for substance use disorders). That said, we’re intrigued to see Pear join the race against Otsuka (who acquired the salvaged pieces of Proteus post-bankruptcy) in integrating digital pill sensing / monitoring, DTx, and pharmacotherapy.

    In Other News:
    Funding and M&A:
  • Vol. 45 (1/6/2021) — Big win for telehealth; Haven dissolves, AMZN charges ahead

    Massachusetts enacts permanent reimbursement parity for telemental health, extends parity for virtual primary and chronic care for 2 years

    TLDR: Massachusetts governor Charlie Baker signed bill S.2984, establishing indefinite payor requirements for reimbursement parity for telemental health services and 2 years of extended parity for virtual primary care and chronic care management. The 2-year extension will allow the state and payors to negotiate more permanent reimbursement guidelines for virtual primary and chronic care.

    So what? While likely to be extended given continued upticks in U.S. COVID cases,  impending end of the public health emergency (PHE) on Jan 31 threatens the security of telehealth reimbursement in states without legislation requiring payors to extend parity. While some payors have more progressively issued voluntary extensions, Anthem and UnitedHealth Group (collectively covering ~90M U.S. lives) previously announced plans to stop covering at-parity. Massachusetts’ new bill will hopefully “prime the pump” for states who have yet to enact similar extensions. While virtual mental health services will now permanently be reimbursed at-parity, primary and chronic care are likely being phased in more incrementally due to lingering uncertainties / criticisms of parity in care quality or costs compared to brick-and-mortar care (e.g., due to overutilization or lacking physical patient observation, respectively). While parity reimbursement is a significant interim win, significant innovation in value-based care (VBC) models expected under Biden’s CMS and CMMI may force near-term facelifts for these policies. Such facelifts will likely incorporate principles like value-based insurance design (VBID) to toggle cost-sharing based on physician-guided essentiality of services, and digital quality metrics (e.g., for access, utilization, per-clinical case presentation costs, aggregate costs) that drive HEOR to inform data-driven reimbursement models.

    For a full reference of state modifications to telehealth requirements (as of Jan 1, 2021), see here.

    How Haven’s high hopes of redefining health care came to a crashing halt

    TLDR: Haven, the Amazon-Berkshire Hathaway-JPM Chase joint venture that shocked the industry in 2018 due to its unlikely suspects, will cease operations in February. This announcement was largely expected by most due to limited progress in concerted / synergistic market offerings, individual company strategies (we’re looking at you, Amazon), and constant flux in leadership.

    So what? While the joint venture may be dissolving, there’s no doubt that the insights gained throughout its short life will (continue to) be leveraged in the respective individual businesses — especially for Amazon.  In 2020, Amazon launched its Amazon Care telehealth service for employees, Amazon Pharmacy via Amazon Prime (thanks, PillPack), and its first 5 Amazon Care “neighborhood health centers”, with another 20+ planned for this year. It’s no secret Amazon is planning to take off the “employees only” training wheels to transform the primary care ecosystem akin to its disruption of e-commerce, and we’re excited to see what 2021 holds for Amazon.

    Investors close out 2020 strong, totaling $13.8B into digital health startups across 372 raises; Twenty Q4 deals round out a record-setting 2020 for digital health M&A

    TLDR: As we highlighted quarter-by-quarter throughout the year, 2020 was a quantum leap in funding for digital health, tallying a year-end $13.8B, nearly double 2019’s $7.2B and 2018’s $7.7B*. Despite Q3 reports that Q4 funding was on-track for a dip from 2020’s red-hot deal surge, investors doled out $3.8B in 92 funding rounds in Q4. Unsurprisingly, 2020 was also a landmark year for digital health M&A, with a whomping 64 deals* (20 in Q4), excluding 6 big SPAC “IPOs” (compare to 2019’s 53 deals).
    * Note: According to MobiHealthNews. Differing scopes / definitions of “digital health” drives slight differences in MobiHealthNews and Rock Health data — e.g., Rock Health estimated funding of $7.4B (2019), $8.2B (2018) and ~$12B (preliminary 2020). CB Insights estimates total 2020 digital health funding of ~$32B due to a far broader scope.

    So what? Despite early whispers that COVID would dry up investor funding in digital health for the year, the pandemic has since been labeled a “black swan” that set some digital health companies’ timelines back and drastically launched others into mainstream clinical care. While the latter are primarily responsible for 2020’s funding boom, companies facing COVID headwinds still benefited from resurgent and novel enthusiasm for digital health at-large. Temporary regulatory and reimbursement waivers drove first-time use of many digital tools by providers and patients alike, providing empirical basis for recognizing their relative value and combating some fears and perceptions previously gating significant adoption. These approvals also provided “natural experimental” data to regulatory agencies and payors. Increased federal and state funding and innovation initiatives for digital health, as well as voluntary payor coverage expansions (though more modest in scale) suggest some “success” of the COVID experiment from a value-based care standpoint.  Investors expect companies riding COVID’s tailwinds — telehealth, remote monitoring, decentralized clinical trial solutions, interoperability tools, patient engagement tools, symptom chatbots, among others — to continue or accelerate this trend in 2021, while global vaccination efforts will hopefully provide a boost for others, contributing to overall growth for 2021 funding.

    Funding and M&A:
  • Vol. 44 (12/23/2020) — Abbott pairs at-home COVID test approval with digital pass and telehealth

    Abbott clinches EUA for at-home COVID-19 test and plans to launch with telehealth partner

    TLDR: In August, Abbott received EUA for its BinaxNOW COVID-19 Ag Card rapid test for use in schools, workplaces and other sites. This point-of-care test required a nasal swab to be taken by a health professional. Abbott has now secured an EUA for the latest iteration of its BinaxNOW test to be used at home, with virtual guidance and results given through Abbott’s NAVICA app. Abbott has partnered with telehealth service eMed to roll out the test and support patients with additional information. Abbott expects to roll out 30M tests in Q1 and 90M tests in Q2 next year. Patients must be prescribed the test ($25) by a clinician, at which point they can download Abbott’s NAVICA app, access the eMed telehealth service and receive the testing kit by mail.

    So what? Abbott marks the first diagnostics giant to receive an EUA for an all-in-one, at-home COVID-19 test solution. Abbott’s EUA follows recent approvals granted to at-home tests developed by Ellume Health and Lucira Health, though it’s the first to offer an integrated telehealth service with the test. Ellume Health remains the only over-the-counter, at-home test, with Abbott and Lucira Health both requiring prescriptions to access tests. However, Abbott’s manufacturing capabilities are likely to trump smaller at-home test players, especially in the near term. In Q1 2021, Ellume Health is expected to manufacture ~9M tests (~100k tests per day) compared to Abbott’s ~30M tests (~330k+ tests per day). Abbott’s NAVICA app is also expected to drive “digital health passport” activity, with increasing potential to scale across the BINAX portfolio of point-of-care and (now) at-home testing options.

    Kaiser’s digital mental health ecosystem sees moderate adoption with physician referral

    TLDR: Starting in 2018, Kaiser Permanente has built an ecosystem of 6 digital mental health apps that clinicians could recommend for patients. Kaiser trained clinicians on how to incorporate these apps in their workflows, typically as an adjunct to treatment or therapy, while also allowing patients to self-refer. Data privacy considerations were crucial to selecting the included apps, which were Headspace, Calm, Whil, myStrength, SilverCloud and Thrive. Initial data from a cohort of ~560 clinicians yielded ~16,000 patient referrals to mental health apps, with 58% downloading an app, 40% using it at least once, and 27% using an app 3+ times.

    So what? Kaiser’s data indicates that app downloading remains a key barrier to patient adoption, despite clinician referral. Though nearly ~75% of patients who opened an app reported sustained engagement (i.e., 3+ uses), ~60% of patients referred to an app never used it. This app utilization data is similar to that seen in other digital health prescription platforms, like Xealth’s partnership with UPMC where it integrated with Epic’s EMR and MyChart solutions. Xealth’s platform facilitated 1.1M digital health prescriptions (not specific to mental health) and ~40% of patients engaged with a digital health solution at least once. The similar adoption data seen  between Kaiser’s ecosystem (requires app downloads) and Xealth’s integrated solution (apps accessible through patient EMR portal) may point to patient willingness to use digital health apps, rather than workflow burdens, as the primary barrier to adoption. A recent survey conducted by Accenture found that data privacy and efficacy remain key concerns gating patient adoption of digital health, despite increased adoption during the pandemic. Persistent provider recommendation and education around key concerns will likely  be crucial to driving adoption of digital health tools in the future.

    Funding and M&A:
  • Vol. 43 (12/17/2020) — First app-connected, at-home COVID-19 test clinches FDA authorization

    First OTC, app-connected COVID-19 test authorized by FDA

    TLDR: The FDA granted EUA to the first over-the-counter at-home COVID-19 diagnostic test, developed by Australian digital diagnostics company Ellume Health. The Ellume COVID-19 Home Test kit consists of a sterile nasal swab, processing fluid, a dropper, a Bluetooth-connected sample analyzer, and instructions to download the Ellume COVID-19 Home Test App app. The app walks users through how to connect the app to the analyzer, collect a sample, and conduct the test. The test is a rapid, lateral flow antigen test that returns results in 15-20 minutes. The test has a sensitivity of 96% and specificity of 100% in symptomatic patients, though performance falls in asymptomatic patients to a sensitivity of 91% and specificity of 96%.

    So what? Ellume’s test approval comes on the heels of the FDA’s first EUA for an at-home test kit granted to Lucira Health last month. However, Lucira Health’s test requires a prescription, has only been studied in symptomatic patients, and will not be marketed nationally until spring 2021. Ellume’s test can be purchased for ~$30, does not require a prescription, and can be used in individuals with or without symptoms. Ellume plans to manufacture 100K tests per day starting in January, with the goal of reaching 1M tests per day by mid 2021. The Ellume app requires users to provide their ZIP code and DOB so that the results are automatically pushed to public health authorities. Though the FDA has approved 25 home sample collection kits to-date, Ellume’s is the first to connect with an app for automated results reporting.

    Cerner and Xealth clinch first roll-out of digital health prescribing platform

    TLDR: After investing $6M in Xealth earlier this year, Cerner and Xealth built a digital health prescribing platform, to allow physicians to prescribe and monitor digital health tools. Cerner’s customer Banner Health is the first to roll out the solution. Physicians recommending digital health tools typically give patients brochures or ask them to make a download from the app store. Though some apps have a clinician portal, this data is often siloed and providers do not have a centralized view of prescribing patterns and patient utilization data.

    So what? Xealth provides the centralized, interoperable infrastructure that is key to lowering barriers to adoption for digital health tools in a clinical setting.  Xealth works with 30+ digital health solutions, including Omada, SilverCloud, ResMed and Healthwise. By providing direct integration with medical record systems like Cerner and Epic, Xealth maximizes efficiency for providers interested in prescribing digital health solutions to patients. Xealth also lowers barriers for patients to find and use their doctor-recommended digital health tool by sending prescription information directly to patients’ smartphones. With a major health system roll-out already under its belt at UPMC (e.g., facilitated 1.1M digital health prescriptions to-date), Xealth is likely to find similar success at Banner Health and beyond.

    Tempus plans expansion to new disease areas with $200M Series G-2 round

    TLDR: With a total of $1.05B in funding and a $8.1B valuation, precision medicine and data company Tempus is broadening its reach outside of oncology, into infectious disease, depression, cardiology, and diabetes. In May, Tempus launched a PCR diagnostic test for COVID-19 run at its labs in Chicago and Atlanta, and has since conducted 1 million tests. Tempus has also collected RNA-seq transcriptome data for 10,000 patients through academic partnerships. The company also launched a service earlier this year enabling psychiatrists to order Tempus’ xG test and receive a molecular report that may inform treatments for major depressive disorder based on patients’ genetic information.

    So what? Primarily focused in oncology, Tempus claims to have collected and analyzed clinical and molecular data for nearly 1 in 3 cancer patients in the U.S. Tempus leverages its multi-omic data to fuel its AI-driven precision medicine software and real-world evidence offerings, which support pharma research and therapeutics development. As Tempus expands molecular test offerings into other disease areas, its clinical-molecular real world database is likely to follow suit. Molecular data collection is increasingly routine in oncology care, making the real-world data space increasingly crowded there. Disease areas that remain on the cusp of precision medicine revolutions, like cardiology and mental health, offer attractive opportunities for Tempus to build highly unique and differentiated multi-omic datasets.

    Funding:
  • Vol. 42 (12/9/2020) — Ro's strategic acquisition | CA launches digital contact tracing

    California becomes largest state to implement Google & Apple’s COVID Exposure Notification API

    TLDR: After announcing joint development of their COVID “digital contact tracing” API in April, our team published an article covering its technical details, pros and cons, and potential post-COVID applications in the digital biomarker space. Following widespread criticism ranging from technical inaccuracies (i.e., poor sensitivity and specificity) to Orwellian privacy concerns, Google and Apple have scored their biggest win, with the CA Notify app leveraging its API to go live tomorrow.

    So what? Since April, the remote monitoring space has seen a steady stream of VC funding, acquisitions, regulatory approvals, CPT code and reimbursement expansions. While these solutions primarily focus on monitoring chronic disease patients, they continue to set the stage for upstream use of digital biomarker surveillance for screening and diagnostic applications. Furthermore, digital biomarkers provide speed, continuity, and cost benefits that instrument-and-reagent solutions cannot accomplish, providing improved overall diagnostic value. However, repurposing these solutions as long-term epidemiological or public health surveillance tools is less certain. One could easily envision smartphone manufacturers adding a “Public Health Alert” feature, similar to the Public Safety and AMBER Alert notifications, that could be used to issue heightened vigilance notices or health recommendations for at a sub-local level for budding outbreak clusters for seasonal pathogens like influenza, future epidemics (e.g., SARS, H1N1, MERS, Zika, Ebola), or even pandemics. Digital surveillance tools could also be leveraged for basic epidemiological research to better estimate disease incidence and prevalence, characterize transmission rates and patterns, and refine disease models. While we’re likely to see fluctuations in reported accuracy and public acceptance of digital surveillance tools in the near-term, we strongly believe they hold long-term potential for transforming preventive care.

    Digital Health Startup Ro Enters Home-Based Care With First Acquisition

    TLDR: Ro is a telehealth company that began as a digital pharmacy called Roman (now a subsidiary) focused on expanding access to men’s health treatments (e.g., ED, hair loss). Ro has since expanded to offer wraparound teleconsultation services and solutions for women’s health (Rory), smoking cessation (Zero), and weight loss (Plenity), as well as a subscription-based digital pharmacy for generics. Ro’s acquisition of Workpath, a technology platform for coordinating at-home phlebotomy visits, marks a milestone in its strategy to create a vertically integrated telehealth platform.

    So what? COVID’s acceleration of telehealth adoption by patients, providers, and payors has made for a record-breaking year of 24 telehealth deals for a total of $1.5B (compare to 2019’s 12 deals at $384M). Amid a landscape of telehealth giants making big moves (e.g., Teladoc’s $18.8B acquisition of Livongo, Amwell’s IPO [now valued at $6.8B], Hims & Hers SPAC merger [valued at $1.6B]), Ro’s CEO, Zachariah Reitano, has said the company is setting its own sights on a public offering. Ro’s angling toward vertical integration is not unlike Teladoc’s strategy with Livongo, which augmented the company’s virtual visit platform with an AI platform with at-home diagnostic and therapeutic applications. We maintain that the rapidly maturing telehealth space continues to be ripe for consolidation, particularly via vertical integration plays that shift perception from telehealth being substitutive for in-person care to telehealth expanding the scope and possibilities of care (e.g., through a feedback loop of real-time, continuous data collection, AI or physician-based interpretation, and digital therapeutics).

    In Other News:
    Funding:
  • Vol. 41 (12/2/2020) — Airlines launch COVID passports | Funding slows, IPOs hot

    Digital health fundings seem to be cooling off after a blazing hot Q3

    TLDR: It’s no secret that 2020 has been a record-shattering year for digital health — by Q3, Rock Health had cataloged ~$9.4B in venture capital funding, already squashing 2018’s full-year ~$8.2B record. While a new report from CB Insights forecasts a ~35% deceleration in Q4 funding compared to Q3, analysts still forecast Q4 2020 funding will edge out Q4 2019’s by ~10%.

    So what? While funding may be decelerating, total 2020 funding is expected to beat 2018’s record-high ~$8.2B by a whomping ~50% and average deal size to-date (~$30M) marks a notable uptick from 2019’s (~$20M). Deal activity has continued to skew later-stage and Q4 IPOs show no signs of slowing, keeping investor enthusiasm hot (e.g., Hims & Hers’ SPAC merger, Butterfly Network’s SPAC merger, Cloudbreak Health’s SPAC merger, Livongo execs’ stealth SPAC launch set for $500M IPO). We see no reason to believe that Q4’s “contraction” in VC funding foreshadows any bending of the overarching funding trendline moving into 2021. We maintain that the take-off for telehealth propelled by COVID is likely to continue translating into expanded opportunities for adjacent technologies (e.g., remote patient monitoring, patient engagement, virtual clinical trials) with (slightly) derisked prospects for investors.

    5 major airlines to roll out CommonPass’ digital health passport next month

    TLDR: Last week, CommonPass, an app enabling digital documentation and sharing of individuals’ COVID status (i.e., test results and vaccination status), signed on the Airport Council International, a group representing almost 2,000 airports around the world, and JetBlue, Lufthansa, Swiss International Airlines, and Virgin Atlantic. This move follows CommonPass’ successful pilot with United Airlines.

    So what? With Pfizer / BioNTech and Moderna’s vaccines now under EUA, digital health organizations are preparing to hit the market with “digital passports” in hopes of reopening domestic and international economies and travel. Key players joining the World Economic Forum’s CommonPass in the space include IBM Watson (Digital Health Pass), International Chamber of Commerce (AOKpass), Mayo Clinic & Safe Health (HealthCheck), with some like Mayo Clinic’s already indicating plans to expand the passport more broadly to infectious disease diagnostics (e.g., STI testing). In a recent interview, IBM’s healthcare blockchain solutions lead emphasized the importance of leveraging open standards (e.g., W3C) and public-private collaboration to avoid locking the world into any single proprietary “passport”. Thus, while CommonPass has seen early adoption by major organizations, we anticipate broad uptake of other leading and local solutions that prioritize interoperability and help normalize it in the lexicon and expectations of patients, providers, and governments globally.

    Signify Health’s integrated care management platform drives access for maternal and child health

    TLDR: Formed from a merger of CenseoHealth and Advance Health, Signify Health is a technology company that provides care integration and management solutions. Iowa Department of Public Health inked a partnership with Signify Health in 2017 to integrate its siloed data systems for care management across obstetrical care, early development and child care. Signify Health has built a shared technology platform for Iowa DPH’s statewide network of community providers to coordinate services, share information and point patients to local community resources for social care / non-medical needs (e.g., housing, transportation, mental health). To date, approximately 400k individuals in Iowa have had a social care need met using the Signify platform.

    So what? Over the past two years, Iowa has seen a jump from 67% to 97% of women receiving a regular source of obstetrical care, representing a significant increase for women insured by Medicaid and/or supported by Title V funding. Medicaid pays for >40% of births across the U.S., and access to obstetrics care is crucial to improving maternal health outcomes in this population. Iowa’s partnership with Signify demonstrates the importance of SDOH data collection and resource distribution (e.g., housing, transportation) in lowering barriers to accessing medical care. Last week, Signify Health acquired PatientBlox, a healthcare payment blockchain company. The acquisition positions Signify Health to better take on value-based care by supporting novel payment models and risk arrangements, increasing the scalability of Signify’s existing medical-social data integration and care management platform.

    Funding:
  • Vol. 40 (11/24/2020) — Amazon Pharmacy goes live | FDA authorizes first at-home COVID test

    Amazon Pharmacy goes live, making waves across pharmacy ecosystem

    TLDR: After acquiring PillPack in 2018, the online storefront for Amazon Pharmacy is finally live. The website allows shoppers to order prescriptions directly through Amazon and pay with their health insurance or out-of-pocket. Amazon Prime members are eligible for free two-day shipping on any prescription, as well as discounts on generic and brand-name drugs when paying without insurance. Incumbent retail pharmacies, like Walgreens, CVS and Riteaid, saw their stocks fall after Amazon’s announcement last Tuesday. However, the jury is still out on the extent of Amazon’s ability to steal patient volumes from major pharmacy retailers. Most notably, patients will have to transfer existing prescriptions over to Amazon Pharmacy, requiring them to contact their prescriber and potentially schedule a visit.

    So what? Beyond traditional retail pharmacies, Amazon also poses a competitive threat to prescription discount solutions and digital pharmacies. Amazon is not only making a play toward convenience, but also toward price transparency. Amazon will facilitate price comparisons for prescriptions through its Prime Rx tool, allowing Prime members to evaluate costs when using insurance vs. paying out-of-pocket with discounts. Prime Rx will likely compete directly with prescription discount and price comparison providers like GoodRx, which just went public a few months ago. While Amazon Pharmacy is available at ~50k pharmacies, GoodRx has a lead with ~70k pharmacies available to consumers and several key partnerships (e.g., Kroger Rx Savings, Walmart’s Prescription Savings Program). Amazon is also driving competition in the online pharmacy space more broadly, particularly with UnitedHealth Group and Walmart who both acquired digital pharmacies earlier this year (Walmart-CareZone, UnitedHealth-DivvyDose).

    FDA authorizes first rapid at-home COVID-19 test as prescription-only

    TLDR: Last week, Lucira Health became the first to clinch FDA authorization for an entirely at-home test for COVID-19, called the “All-In-One Test Kit”. The single-use home test kit requires a doctor’s prescription and is expected to cost less than $50. Based on LAMP technology, the test requires a nasal swab, which is swirled into a solution and inserted into a portable device that reads out a light-up result within 30 minutes. The test will soon become available to patients of Sutter Health and South Florida’s Cleveland Clinic, but will not be marketed nationally until spring 2021.

    So what? Lucira Health joins nearly 300 COVID-19 tests authorized by the FDA as the first true at-home test. However, at-home testing could distance patients from the reporting process, which requires a chain of communication from patients to healthcare providers to public health officials. This is undoubtedly part of the FDA’s rationale for making the Lucira test prescription-only, such that patients must report their results back to the prescribing physician. Though the test has only been studied in symptomatic patients so far, one could imagine this at-home test being extremely attractive for the routine testing that will likely be required for a transition into a “new normal” in 2021. At-home test providers like Lucira Health are well positioned to integrate with the rising wave of digital passport solutions (e.g., IBM Health Pass app, CommonPass app) that help to verify an individual’s COVID status ahead of entering public spaces (e.g., work, travel).

    EHR integration and reimbursement challenges remain crucial to teleheatlh’s impact

    TLDR: According to a recent survey of >1,500 physicians by the COVID-19 Healthcare Coalition, key challenges to sustained telehealth adoption include reimbursement, EHR integration and patient access to technology. The survey identified a consensus among providers that telehealth has a positive impact on patient outcomes, experience and cost of care. However, >70% of respondents said the potential roll-back of reimbursement coverage would be a major challenge to sustained adoption. More surprisingly, ~60% of clinicians reported that they still cannot access telehealth interfaces directly through their EHR systems. Synchronous video calls remain the dominant telehealth modality (~80% use interactive video visits) with very few using RPM tech (~11%).

    So what? Looking ahead to a post-pandemic era, reimbursement for telehealth visits will likely be the primary lever of sustained adoption. Just last month, CMS added reimbursement for 11 new telehealth services during the public health emergency. Though Medicare leaders have called for continued access to telehealth, further evidence around cost effectiveness and patient outcomes will likely be crucial to driving sustained uptake by private payers. Initial data suggests cost-savings, especially in chronic disease care, and improved patient experience. Younger generations are also expected to act as champions of telemedicine, driving continued adoption in the future. Millennials and Gen Z are willing to pay a “convenience premium” for telehealth services and are more comfortable with technology, while older participants tend to prefer traditional care.

    Funding:
  • Vol. 39 (11/17/2020) — Amwell's Q3 revenue jump | Google's new AI tool for medical records

    Amwell’s Q3 revenues jump 80% heading into a new COVID “peak”

    TLDR: In Amwell’s (AMWL) first public earnings call, co-CEO brothers Roy and Ido Schoenberg reported total Q3 revenues of $62.6M (vs. ~$35M in 2019), projecting FY 2020 total revenues of ~$240M (vs. $149M in 2019, or ~60% growth YoY). While it’s no surprise that Amwell and its virtual visit competitors are on-track for a record-setting growth year, interesting highlights of the earnings call include:

    • Inversion of mix of AMG (Amwell providers) vs. non-AMG  (health system / health plan providers compared to last year — now ~75% non-AMG, reflecting a shift toward hybrid / “virtual first” + brick-and-mortar care models

    • ~30% decrease in visit volume (1.4M in Q3 vs. 2M in Q2) compared to Q2’s peak volumes associated with COVID, with a shift toward lower-margin visits

    • Margins improvements expected in the mid-term (Amwell’s long-term GM target is ~50%) as new telehealth experiences translate into sustained post-pandemic use and expanded use of specialty care visits

    So what? While Amwell lags its primary competitor Teladoc (TDOC) in scale of revenues (~75% less expected in 2020) and visits (40-50% less expected in 2020), the newly public company has experienced massive growth during the pandemic. Teladoc has long enjoyed the scarcity premium of being first-to-market, with much skepticism over newer competitors’ ability to achieve comparable scale. One such concern has been ability to scale an external network of providers (e.g., Amwell’s non-AMGs) to provide patients with a unified virtual + brick-and-mortar care experience (i.e., being able to see your PCP or specialist rather than a separate virtual provider, or worse, a new virtual provider each time). In the last year, Amwell has expanded its provider network tenfold from just 6,000 (Q3 2019) to 62,000 (Q3 2020). Another concern has been the ability of competitors to scale globally. While Amwell has work cut out for itself in this domain, the company expects its recent Google Cloud partnership to be a major driver for global expansion. As Amwell continues to scale on the back of the pandemic, we expect Amwell to call Teladoc’s raise in the chronic disease management space (i.e., creation of a unified care platform via merger with Livongo).

    Google Cloud launches AI tools for mining unstructured medical text

    TLDR: Last week, Google pulled back the curtains on its two latest healthcare tools: Healthcare Natural Language API and AutoML Entity Extraction for Healthcare. Both tools can be used to mine, extract, and organize data from unstructured clinical records, a major pain point for providers looking to more effectively leverage their clinical data and for pharma and RWD players hoping to gain insights from deeper clinical information that typically requires time-intensive manual curation. The  NLP API will be available for free through Dec. 10 while AutoML will be free for the first 5,000 text records and 1,000 document pages imported.

    So what? In its announcement, Google Cloud highlighted a few key use cases it sees as strong fits for the technology — telehealth visit transcript mining and documentation, more effective pharma patient-to-trial matching, and provider reporting requirements (e.g., HEDIS, disease registries). We additionally see strong fit for this technology for:

    • Improved clinical decision support, value-based care, and population health management tools providers may develop internally

    • Potential revenue diversification for providers via enhanced partnerships with RWD aggregators or outright development of proprietary RWD offerings

    • Enriched utility of interoperable clinical records shared between providers (i.e., reduced “missing” fields and errors)

    Virtual fertility clinic launches AI tool to predict probability of natural conception

    TLDR: UK-based fertility company Apricity has built an algorithm to predict female fertility based on lifestyle factors. The company serves as a virtual fertility clinic, offering tele-consultations and AI-driven personalized treatments (e.g., IVF, FET, IUI, egg freezing). It just launched an online tool that analyzes lifestyle factors to predict a woman’s chances of conceiving naturally.  Its predictions are based on age, BMI, weekly alcohol intake and smoking habits. The key value of the tool appears to be allowing users to adjust their inputs and see how their fertility predictions may change over time, showing individuals the impact lifestyle changes may have on improving fertility (e.g., healthy BMI, reduced alcohol consumption, smoking cessation).

    So what? Though this tool focuses on lifestyle factors, predictive algorithms may eventually incorporate both self-reported and biometric data to identify digital biomarkers in fertility. Metrics like body temperature, heart rate, menstrual cycle length, flow rate and pain level may be combined to develop digital screening or diagnostic tools for key conditions related to infertility (e.g., endometriosis, PCOS) that are often misdiagnosed. With over 3,000 women’s health apps available today, there are a myriad of players collecting key metrics that could be predictive of fertility. The Apple Women’s Health Study is particularly promising for digital biomarker discovery, given its massive scale (500,000 participants) and longitudinal approach (10 years) to collecting digital metrics linked to phenotypic data about key conditions.

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  • Vol. 38 (11/10/2020) — Unpacking Takeda & Seqster's RWD Partnership

    How Biden is expected to unwind dozens of Trump-era health-care changes

    TLDR: Key changes: (1) sweeping reform of appointed health agency officials, with a focus on scientists and doctors, pandemic specialists, and Obama-era ACA champions, (2) generally speaking, reinvigoration of the ACA, though potentially limited by SCOTUS’ imminent hearing on the constitutionality of the individual mandate and potential Republican control of the Senate; (3) rollbacks of Trump’s executive orders and administrative actions limiting state Medicare and Medicaid access (e.g., slashed marketplace advertising budgets, work eligibility requirements, premium cost-sharing), (4) reversal of Trump’s Title X reforms banning funding recipients from performing or referring abortions.

    So what? The political philosophies underlying Biden-Harris’ anticipated healthcare changes should come as no surprise. While Harris was an early “Medicare for All” champion and Biden a more moderate “public option” proponent, both plans for restructuring America’s coverage will be challenging without a decisive Democratic Senate majority. More myopically, we expect a Biden administration to usher in a decisive, top-down strategy for halting and reversing record-breaking COVID infection rates, and ultimately, implement coordinated federal-state plans for safe re-openings and vaccine rollout. At a high-level, Biden’s administration is expected to contrast the Trump administration’s tone with respect to social determinants of health (SDOH) and equity of healthcare access and outcomes, with expected investments in virtual care and revitalized emphasis on value-based care and alternative payment models via CMMI. While agency deregulation and unique emergency / pandemic-driven authorizations during Trump’s term have seemingly set the stage for a digital health “boom”, we expect the next 4 years under Biden to bring structured investments, industry expertise, and emphasized goals of equity and access that will allow the digital health sector to leverage built momentum and thrive.

    Alphabet unveils open-source “Project Amber” for digital mental health biomarker discovery, invites collaboration

    TLDR: The program aims to leverage the nearly century-old technology of EEG and advancements in machine learning to discover composite biomarkers for depression, anxiety, and other mental health conditions. While the program’s scope is broad, its initial focus appears to be on development of compound subjective-objective biomarkers (i.e., objective digital biomarkers that complement subjective patient experience and clinician observations) with highest initial uptake for patient monitoring and prognostic applications.

    So what? Project Amber signals a tonal change from “big tech”, which to-date has largely safeguarded in-house development for leading digital biomarkers (e.g., Apple & Google / Fitbit’s Heart studies). While Alphabet will still pursue independent development, this open-source call for collaboration invites leading researchers and digital health experts to leverage Project Amber’s portable EEG hardware design, machine learning techniques, and data visualization and stimulus software to derive their own insights. While EEG biomarkers are largely perceived as non-novel and lab-based (i.e., requiring presentation to a traditional healthcare setting), Alphabet’s prototype adds to a growing cohort of portable EEG devices aimed at virtual / remote use. Outside of EEG, other companies are pursuing smart device-based digital biomarkers for mental health (e.g., Mindstrong Health, Ellipsis Health, BrainCheck, CompanionMx).

    FDA approves Apple Watch app for treatment of PTSD-related nightmares

    TLDR: Founded in 2015, NightWare built an app to help individuals suffering from PTSD-related nightmares to improve restful sleep, and it has just been FDA approved for use on Apple Watch. The app monitors sleep patterns through heart rate and movement, and builds a customized treatment in the form of vibration patterns that interrupt nightmares without fully awakening the user. The NightWare device is prescription-only and intended as a combination therapy alongside prescribed medications and other therapies for PTSD. The prescribed NightWare kit includes an Apple Watch, which should only be worn during sleep due to false alerts and battery life (i.e., needs to charge during the day). Given recent FDA approval, it remains to be seen how payers will navigate coverage for NightWare as a companion therapy, including the AppleWatch hardware.

    So what? NightWare joins a growing list of FDA approved digital therapeutics in mental health. In PTSD, the commercial DTx landscape is relatively nascent, with Freespira as the key FDA-approved solution and other products still in development (e.g., Pear Therapeutics). Since its FDA approval, Freespira appears to have garnered insurance coverage by some private payers including Highmark and Anthem. Payer coverage of FDA-approved DTx is improving, but remains spotty across payers. Long-term evidence generation around care outcomes and cost appears to be crucial for more robust payer coverage. Pear Therapeutics just released analysis of real-world claims data, suggesting reduced payer spending of ~$2,150 per patient over six months with its reSET-O product for opioid use disorder. Though Pear’s data suggests near-term costs savings, ICER experts call for additional evidence to compare the long-term clinical and economic value of DTx companion therapies, like reSET-O and NightWare, relative to standalone medication.

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  • Vol. 37 (11/4/2020) — A big week for RWD

    Pairing wearables data with self-reported symptoms could improve COVID-19 prediction

    TLDR: In this updated readout from the Fitbit / Scripps DETECT study (Digital Engagement and Tracking for Early Control and Treatment), researchers used a “triad” of resting heart rate, sleep quality, physical activity data from 3,800 symptomatic patients (of the 30,000+ total patients enrolled) along with patient-reported symptom data to improve diagnostic accuracy to 0.80 (from 0.77). Notably, while sleep and physical activity were significant predictors (AUC of 0.68 and 0.69, respectively), resting heart rate was not (AUC of 0.52).

    So what? In an August readout from Fitbit, researchers reported diagnostic accuracy of AUC 0.77 in detecting COVID across 1,100+ patients using the same digital biomarker triad with 4 days of prior symptom history. This updated readout not only validates the initial findings among a much larger study group, but shows slight improvement in overall diagnostic performance by layering patient-reported symptom data into the “triad” as a fourth digital biomarker. While still in its infancy, the digital biomarker space is showing early promise as a complementary (and in the distant future, perhaps substitutive) approach to traditional biomarkers for detecting disease. The overwhelming trend toward multi-omic signatures in the “traditional” biomarker space is already coming to bear in digital biomarkers, which we expect will explode in complexity, diversity of biometrics and behavioral markers, and patient-reported data in the years to come. In addition to the Fitbit DETECT study, other major COVID-focused digital biomarker development programs underway include Huami’s ~1.3M-user study in China and the Robert Koch Institute’s study in Germany with 500,000+ enrolled.

    Takeda extends RWD partnership with patient-centric data aggregator Seqster 

    TLDR: After investing in Seqster in February, Takeda has now announced an extended partnership with the RWD start-up dubbed the “mint.com” of health data by its CEO, Ardy Arianpour. Under the partnership, Takeda will gain access to the Seqster Research Portal (SRP) which matches patient-level clinical data from 3,000 hospitals / health systems and 150,000 doctor’s offices with patients’ molecular and wearables-generated data. Takeda plans to leverage the portal to launch 12 distinct use cases across the organization in the next few weeks.

    So what? Takeda’s announcement comes on the heels of its recent partnership with Amazon Web Services and Accenture aimed at cloud-driven organizational infrastructure transformation. Other global pharma giants have inked similar partnerships (e.g., Merck-AWS, Google-Pfizer, Google-GSK, Google-Bayer) establishing the infrastructure to support larger, more real-time use of RWD. The Takeda-Seqster partnership also follows a trend of pharma companies partnering with RWD aggregators (e.g., Roche / Genentech-PicnicHealth) to tap into larger, more multi-omic datasets with potential for massive scale, automated data linkage (e.g., Datavant), and near real-time reporting. Stay tuned for our interview next week with Seqster CEO, Ardy Arianpour, and Takeda Head of Emerging Technologies & Digital Partnerships, Emir Roach!

    Medidata, TriNetX and Datavant join forces for real-world data pact

    TLDR: The partnership will link real-world data collected on new therapies to generate more robust safety and efficacy profiles. The companies each play distinct roles in the engagement, with Medidata’s clinical research platform, TriNetX’s real-world data from a global network of HCOs, and Datavan’ts token-based data ecosystem. They aim to link relevant data for new therapies before trials, during clinical trials and after approval, with the ultimate goal of optimizing capture for safety and surveillance data.

    So what? Each player in this partnership arguably has the resources and runway to roll-out directly competitive offerings on real-world data for new therapies. However, perhaps the most differentiating aspect of their joint offering is one that these players could not build alone. This is the opportunity for seamless, longitudinal visibility on the  performance of newly approved therapies, which would appeal to pharma and payers alike. Longitudinal data capture is one of the key pain points observed with disparate RWD offerings available today, because patient data is so often siloed across disparate institutions and IT systems (e.g., EMR, LIS, EDC, etc.). Datavant’s market-leading “patient key” tokenization technology is particularly crucial to building longitudinal, patient-level datasets spanning data sources, as evidenced by its growing number of data partnerships (e.g., Parexel-TriNetX, Takeda-Seqster, Blue Health Intelligence, Medable, Precision Digital Health, Prognos, Symphony Health, Trialbee, Castor). Given Medidata’s entrenchment in clinical trials, Datavant’s open data ecosystem and TriNetX global reach across ~170 HCOs, these companies are incredibly well-positioned to facilitate longitudinal data capture that could offset the need for post-market studies requiring active patient follow-up.

    In Other News:
    Funding and M&A:
  • Vol. 36 (10/28/2020) — 5 ways the election could impact digital health

    Medidata acquires MC10’s digital biomarker business

    TLDR: Medidata  offers end-to-end software solutions for clinical trials through its Rave Platform, including trial planning, data management and analytics. Medidata’s market-leading Rave EDC solution offers integration with the Rave Patient Cloud, a suite of patient-centric tools including eConsent, eCOA, and wearable sensors. Medidata’s acquisition of MC10 will bolster its Patient Cloud platform through MC10’s BioStamp sensors and analytics capabilities. Medidata will leverage MC10’s biosensors to expand its portfolio of patient-facing tech, better enabling decentralized clinical trials and biomarker discovery efforts.

    So what? Digitization and decentralization of clinical trials has become increasingly important during the COVID-19 pandemic. Researchers also estimate that ~70% of clinical trials will likely include wearable sensors by 2025. Medidata’s acquisition of MC10’s biomarker business will allow the software giant to expand its decentralized trial capabilities toward remote, continuous biometric measurement. MC10’s BioStamp nPoint sensor captures 44 standard metrics around activity, posture, sleep, sEMG and vital signs (e.g, continuous HR and HRV, respiration rate). MC10’s digital biomarker capabilities will allow Medidata’s industry customers to innovate in remote biometric data capture, analysis and integration with other data capture mechanisms used in trials.

    LabCorp enhances decentralized clinical trial offering with integrated platform

    TLDR: LabCorp announced a new technology platform that facilitates interoperability across disparate tools deployed in clinical trials. LabCorp’s drug development business, Covance, aims to leverage this integrated platform to reduce administrative tasks for patients and sites while achieving operational efficiencies for study sites. The need for interoperability is rooted in LabCorp’s recent acquisitions of GlobalCare (global mobile nursing and ambulant care organization) and snapIoT (global med tech company with digitized clinical trial platform). Integration with snapIoT’s platform will significantly bolster Covance’s decentralized trial technology through eConsent, ePRO, eCOA, telemedicine and connected device integration.

    So what? Earlier this year, LabCorp inked a deal with digital trial software company Medable to integrate its patient and site interfaces. LabCorp’s latest acquisitions and integrated tech platform indicate a sustained effort toward decentralized trial capabilities embedded in Covance’s own offering. A recent PharmaIntelligence survey suggests that ~90% of experts anticipate sustained adoption of decentralized trials in the near term. However, data protection and privacy remains a key obstacle in implementation for decentralized trials. This challenge is evidenced by a recent ransomware attack on global software company eResearchTechnology, which was facilitating ePRO for several COVID-19 trials at the time. Data security concerns will likely remain paramount to industry stakeholders decision-making around decentralization of endpoint data collection (e.g., ePRO) to decentralize in the future.

    5 ways the election could upend digital health, according to 14 healthcare CEOs, investors, and policy experts

    TLDR: CEOs and leaders of digital health think tanks, venture capital funds, and start-ups believe a Trump victory in next week’s election could hold detrimental consequences for the digital health space. Among these are: (1) dismantling of the Affordable Care Act, which could threaten ~30M Americans’ coverage, valuable contracts with health plans on individual exchanges, and more broadly, innovation in a potentially unstable regulatory and payment landscape; (2) concomitant dismantling of the Center for Medicare & Medicaid Innovation (CMMI), which could be detrimental efforts to reform payment mechanisms (e.g., value-based care models); (3) threats to patient privacy and protection under policies resembling “consumer protection” rather than “patient protection”; (4) despite existence of bipartisan support for telehealth (most notably from Trump’s CMS Administrator Seema Verma), rollbacks on payment parity for virtual care in favor of treating the “patient as consumer” under a “free market” that relies on digital health companies to cut costs to remain competitive (proponents of this argument believe that a Biden administration’s public option could be used to exert competitive pressure on commercial payors to maintain parity coverage); and (5) continued failure to address systemic access and equity issues in connectivity, digital infrastructure, and social determinants of health, which drive up to 80-90% of clinical outcomes.

    So what? Market mechanics and policies aside, fundamental differences in the two candidates’ political philosophies create two diverging paths into healthcare’s digital future. While Trump’s HHS, CMS, and FCC appointees have pushed innovation in telehealth and information blocking — two significant and welcomed changes in the space — his administration largely stands for deregulation and the “status quo” of healthcare in terms of how equitably it distributes. Biden’s nomination, on the other hand, was won on the back of promises of healthcare reform that stresses improved access for low-income and rural Americans, key populations for which digital modalities offer such advantages and potential to improve and equalize clinical outcomes. It’s for this reason that we have chosen not to remove “politics” from business and remind our readers to vote, and to vote for a future that brings the digital health space closer to improving outcomes for all.

    Funding and M&A:

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