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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Click Therapeutics, a provider of prescription treatments via a smartphone, has acquired assets of Better Therapeutics, Aaron writes.

Why it matters: Several companies have made early headway in the space only to struggle amid reimbursement hurdles.

Context: Better Therapeutics announced in March that it would seek strategic alternatives.

Zoom in: The assets are focused on obesity and  cardiometabolic disease, which has become a cash cow with GLP-1s having become all the rage.

Click intends to focus on further development of AspyreRx to adapt it for the treatment of obesity and to benefit from Click's AI-enabled platform as part of the company's obesity digital therapeutic that is in development.

Driving the news: A wave of medical services delivered via software has the potential to expand access to new therapies and help keep people out of the hospital — but the health system is still trying to figure out how to pay for it.

Click Therapeutics, along with Otsuka Pharmaceutical, developed Rejoyn, a smartphone-based treatment for major depressive disorder symptoms.

What they're saying: "Click's acquisition of Better Therapeutics aligns with its rather unique platform approach, which not only addresses the point solution fatigue felt by providers, but also allows data collected across a variety of therapy use cases to be used to improve patient outcomes overall," says Carrie Nixon, managing partner at Nixon Gwilt Law.

State of play: Many digital therapeutic companies are struggling to stay afloat.

This month, digital therapeutics company Akili (Nasdaq: AKLI) said it planned to lay off half its workforce and would explore strategic options as the troubled firm continued to suffer setbacks.

A year ago, Pear Therapeutics was sold for parts.

The bottom line: It's difficult to accurately assess the efficacy of many  tools, largely because of low adoption rates due to lack of reimbursement.

"In health care, if it doesn't get paid, it doesn't get done," Nixon says. "We're unlikely to see a major success in the field until there is a reliable reimbursement pathway in place."

1 big thing: Click buys to build

Illustration of a social media notification with a pill inside

Virtual addiction treatment provider Boulder Care has raised a $35 million Series C led by new investor Advance Venture Partners, CEO Stephanie Strong tells Erin exclusively.

Why it's the BFD: Rates of addiction and overdose rose sharply amid the pandemic, and research suggests treatments still aren't reaching those most in need.

Driving the news: The Biden administration announced in February that pandemic-era policies that eased access to opioid addiction treatment —including the ability to start medications like buprenorphine via telehealth — would continue permanently.

Zoom in: Stripes joined the round alongside existing investors First Round Capital, Qiming Venture Partners and Laerdal Million Lives Fund.

Funds will fuel expansion into new geographies, with a goal of going from six to 10 states in the next two years.

The round gets Boulder to profitability, per Strong, who declined to say whether the company had plans to raise again.

Flashback: Boulder in 2022 raised a $36 million Series B and in 2020 collected a $10.5 million Series A.

How it works: The Portland, Oregon, company offers virtual treatment for opioid use disorder and alcohol use disorder by working with Medicaid plans.

Boulder employs addiction medicine experts, peer recovery specialists and case managers to provide patients with medication-assisted treatments like buprenorphine, peer support and help with social services such as finding stable housing.

Along with the funding, Advance Venture Partners (AVP) managing partner David ibnAle joins Boulder's board and Stripes partner Karen Kenworthy joins as board observer.

What they're saying: Boulder's bespoke nature — a product of building state by state in value-based arrangements with Medicaid plans — is both its biggest strength and biggest challenge, per Strong and AVP's ibnAle.

"Philosophically the biggest thing for us is scaling a model that is incredibly high-touch [and] bespoke by design," Strong says. "At the same time, we know there are 50 million people with substance use disorder."

"They've built this brick by brick," ibnAle says, which "makes it important for them to focus on the economics of everything they do."

The big picture: The virtual addiction treatment market is growing, buoyed by the rise of telehealth, increased momentum behind value-based care arrangements, and a heightened awareness of evidence-based approaches to addiction and substance overuse.

"Telehealth facilitates care for many patients who have difficulty attending in-person appointments due to logistical and psychological barriers," write researchers in a 2021 study in the Harm Reduction Journal.

State of play: Virtual addiction treatment companies that raised recent funding include:

Virtual substance use treatment company Pelago raised a $58 million Series C in March.

Hybrid addiction treatment provider Eleanor Health in 2022 closed a $50 million Series C.

Virtual opioid use disorder treatment startup Bicycle Health in 2022 raised a $50 million Series B.

1 fun thing: Boulder's name is not an homage to the Colorado city of Boulder, but rather is meant to represent the weight of addiction and the role of peer support in overcoming it.

"In our logo are those stacked rocks you would see on a trail, left by someone who's walked that path before you," Strong says.

2. The BFD: Boulder lifts $35M for addiction treatment

Illustration of a man pushing a giant pill up a hill

Want more health tech deals? Check out the Axios Pro Deals Tracker.

• The Riverside Co. invested in CRIO, a Boston provider of e-clinical software that had raised around $17m from firms like Rally Ventures. clinicalresearch.io

 • Doctolib, a French provider of administrative tools for health care providers valued by private investors at nearly €6b, acquired Aaron.ai, a German provider of patient communications tools that had raised around €4m from BonVenture, Knight Capital, Futury Capital and IBB Ventures. axios.link/3UUDfyW

• Patient Square Capital, a Menlo Park, Calif., health care investment firm, is raising its second fund and seeking a target greater than $6b, per PitchBook. axios.link/3K8LUZP

• Riata Capital Group, a Dallas PE firm, closed its second fund with $285m. riatacapital.com

• Invidia Capital Management, an NYC health care PE firm founded by former Goldman Sachs partner Jo Natauri, launched with a strategic investment from GCM Grosvenor, a global alternative asset management tools provider. axios.link/3URg9td

• Perceptive Capital Solutions, a health care SPAC formed by Perceptive Advisors, filed for a $75m IPO. axios.link/3QWdEnY

3. Deals o' the day

• Mike Gullikson, former chief growth officer at Harbor Health, joined Wellnecity as chief commercial officer. wellnecity.com

• Daniel Durand, clinical associate professor at Stanford, joined Prenuvo as chief medical officer. prenuvo.com

• Chris Scotti, former executive director at Morgan Stanley, joined Leerink Partners as senior managing director of institutional sales. axios.link/4bNls3t

• Jordin Green, former senior director of enterprise marketing at Spring Health, joined Blink Health as director of business-to-business marketing. blinkhealth.com

4. It's Personnel

▶️ Latest ChatGPT could accelerate chatbot care — Axios

5. Your daily dose

Illustration of a Axios brand medicine bottle that says "your daily dose" next to a spoon.

🥗 Erin made a tasty salmon salad with kale, cranberries, and pumpkin seeds to celebrate summer's arrival.

🍴 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Brad Bonhall. Please ask your colleagues, friends and family to sign up.

May 22, 2024

1 big thing: Click buys to build