DM panel sees land grab due as industry growing wise

BOSTON – In digital medicine (DM), “you’ll see insane acquisitions at extreme prices for those [biopharma] companies who believe it’s a threat,” predicted Christine Lemke, co-founder and president of Evidation Health Inc., during the opening panel of an all-day DM exploration at Biopharm America. “For those companies who believe it’s a toy, they will dabble in small things. They’ll think that software is fungible and we can still do things the old way, and they won’t transform themselves. It will be interesting to see who’s right or wrong.”

San Mateo, Calif.-based Evidation is among a growing number of companies set up to try out the idea that, since computers can manipulate as well as store data, they might come up with medical knowledge that would translate into more effective drugs.

Another company – deemed by Lemke “one of the pioneers in the space” – is Pear Therapeutics Inc., with offices in Boston and San Francisco. CEO Cory McCann was also on the panel. Along with the categories of “threat” or “toy,” McCann added “tool” as a pigeonhole in which pharma likes to slot DM. “Right now, [the first] conversation is almost invariably around tools,” he said, and the field has evolved fast.

“I can remember four years ago, we were out telling the story and people just had this glazed look about them. I’m not even sure there was full comprehension of what the story was. The year thereafter, they understood the story and they told us it was the dumbest thing they’ve ever heard. Last year, I think everyone had a digital mandate,” he said, as DM started appearing as a topic at conferences, having become “pretty standard across most of pharma.” Lacking, though, was “savvy around the business model and the regulatory side,” he said. “It’s my belief that we’re going to go to pharma [next] year at J.P. Morgan, and they’re going to tell us it was their idea, and it’ll be a great conversation.”

Pear’s lead product is Reset, a mobile medical app to be used in conjunction with outpatient therapy for substance use disorder. Evidence “for what we hope will be approval” came from an experiment that showed improved abstinence and treatment retention when used in conjunction with face-to-face therapy with people who misuse stimulants, marijuana, cocaine and alcohol. The study enrolled 507 patients across 10 treatment centers nationwide, randomized to get either face-to-face therapy, or less face-to-face therapy plus Reset. Patients received 12 weeks of typical outpatient treatment with or without the app, and abstinence was measured twice weekly via urine analysis, breath analysis and self-reports. In patients who were dependent (n=395), 58.1 percent with Reset were abstinent in study weeks 9-12, while 29.8 percent given only face-to-face therapy alone were abstinent during the same time frame (p<0.01). In participants who tested positive for drug use at the start of the study (n=191), 26.7 percent with Reset were abstinent in weeks nine through 12, while only 3.2 percent with face-to-face therapy stayed off.

With regard to therapy retention, patients on Reset showed statistically significant improvement compared to face-to-face therapy alone (p=0.0051). At the end of 12 weeks, 61 percent of patients on face-to-face therapy were retained vs. 70 percent with Reset.

Along with the “community reinforcement approach” deployed by Reset, the company is developing drug-and-app combo therapies called Eformulations for various disorders including opiate dependence, schizophrenia, post-traumatic stress disorder and generalized anxiety disorder. In February, Pear closed on a $20 million equity financing led by 5AM Ventures, Arboretum Ventures and Jazz Venture Partners, with Bridge Builders Collaborative and several more aboard as well.

SANOFI GOES 'A DIFFERENT WAY'

Evidation’s Lemke conceded it was “strange to talk about [DM] in a room of folks who create biological therapies,” but foresaw “a world [where DM] starts as complementary or adjacent to traditional therapy” and that goes on to generate “enough clinical evidence, enough economic evidence, to move to replacement digital therapies. This isn’t going to be universal [or] a panacea of change, but in certain types of conditions in certain stages for certain people” may be used as first-line responses, she said.

Yarmela Pavlovic, partner with the London-based law firm Hogan Lovells, said that “a flood of technologies” came into the DM space as enthusiasm grew. “For lack of a better way of saying it, there was a lot of fluff,” she said. “We’re now coming to a place where we’re starting to see the products that have real, true value rise to the top.”

Pear’s McCann agreed that “five to seven years ago, as the digital health trend, the digital health craze was kicking in, there was a bit of a push to define anything that worked as digital health, and to sell it on the back of that definition. We started off very broad, and from a broad beginning” branched far out, so that now there are about 25 approaches claiming to qualify. “We started off with lots of small bets and lots of ways to think about strategy,” and lately “you’re seeing some of the winners who were seedlings five years ago now moving into series B, C, D, and all of the [financing] rounds that none of us really wants to do,” he said.

Researchers at Pear are “very struck by the fact that ‘data’ means very different things to very different people. We think about data with a capital D vs. data with a lower-case D, one being clinical trial data, the other being real-world data. Both are certainly important, but as we were pulling together the story of Pear, we looked out at the landscape and we saw lots of companies that had arguments around real-world efficacy [for their approaches, without clinical-type results]. I think that’s just because digital technologies are great at collecting data, they’re great at staying in peoples’ pockets, and so there are a lot of suggestions for real-world efficacy. But there was a dearth of real, hard-core clinical trial data, the kind of data that, if we were to walk into any of the pharma rooms here, those companies would be talking about it.” With Reset, Pear seems to have brought the goods.

McCann finds the acquisition prospects of DM firms by pharma “a logical extension of their business model. They’re cash-rich, margin-rich companies which are not built to do what these digital companies are doing. They’re also very deal-forward companies – they’re used to going out and in-licensing portfolios of technology to bring into their commercial organizations. We think a lot about how to plug ourselves in there.”

As biopharma firms puzzle out how best to work with DM, “Sanofi has gone a different way,” Evidation’s Lemke said, pointing to the deal disclosed earlier this month in which Paris-based Sanofi SA and Mountain View, Calif.-based Alphabet Inc., the parent company of Google, invested about $500 million in a joint venture to combine devices with services for diabetes. Sanofi had earlier made public a diabetes collaboration with Google.

Last month, Glaxosmithkline plc unveiled a team-up with Alphabet to evaluate bioelectronics medicine for chronic conditions, with type 2 diabetes expected as the first focus. Specifically, GSK, of London, and Verily Life Sciences LLC – formerly known as Google Life Sciences – have agreed to invest up to £540 million (then US$712.2 million) into Galvani Bioelectronics over seven years, subject to successful completion of various discovery and the reaching of development milestones. GSK anticipates holding a 55 percent interest in Galvani, while Verily will hold the rest.

Sanofi is working with Verily, too. “That could be a new model, where you’re not spending a billion dollars on a [DM] startup company with who knows what,” Lemke said.

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