Smart pill maker Proteus Digital Health has filed for bankruptcy, the latest sign of trouble at a Silicon Valley company once valued at $1.5 billion. Despite 11th-hour objections by some investors, a judge has approved the sale of Proteus Digital Health's assets to a pharmaceutical giant. Taking this and previous comments from Proteus in mind, the shift to conditions more deeply aligned with pharmacologics is an understandable tactic for a high-profile startup looking to regain its footing. It simply means the evidence is yet to be seen.”. Enclose phrases in quotes. Stat News reported that a deal with Otsuka was terminated in January of this year. A collaborative team comprised of Otsuka and Proteus employees will be dedicated to commercial development and market coordination for the ABILIFY MYCITE System, software integration and standardization, manufacturing and supply chain integration, and coordination. It has an estimated 200 to 999 creditors, and its top creditors include PREI's Westport Office Park ($1,035,305), Romaco North America ($510,848), Otsuka America Pharmaceutical ($397,721), Workday ($288,000) and Xceliance ($215,616). Reproduction in whole or part is prohibited. It may be acquired in a $15M 'stalking horse' bid. The company filed for Chapter 11 bankruptcy protection June 15. The one-time digital health unicorn will now be able to exit bankruptcy as part of a deal with Otsuka Pharmaceutical, one of its main customers. Proteus fits in the so-called "digital therapeutics space" because it augments the traditional process of taking a medication. By. In 2017, it announced a partnership with Otsuka, a pharmaceutical company. The Silicon Valley company develops ingestible sensors that communicate when medicines are taken, plus a wearable patch that monitors the response. Get this delivered to your inbox, and more info about our products and services. Following news of hardships at Proteus Digital Health, CEO Andrew Thompson has told STAT News that the company is winding down its high-profile $88 million deal with Otsuka Pharmaceutical, and will be pivoting from its current primary focus on mental disorders toward cancers and infectious disease treatments. In approving the sale, Shannon said Otsuka's bid to buy Proteus' assets was executed "at arm's-length, in good faith, and without collusion or fraud," according to the court order. The months following this approval saw the digital health company announce plans with systems and health plans like Megellan Health and Children’s Health to roll out pilots of its core adherence system. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond. © 2020 Questex LLC. The Japanese drug maker Otsuka has been approved to purchase the assets of bankrupt smart pill maker Proteus Digital Health for $15 million — capping off a spectacular fall for Proteus, which raised close to $500 million and soared to a valuation of $1.5 billion on the promise that its sensor technology could revolutionize how medications are taken and tracked. 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Credit: Compass app to help NHS prevent hospital illnesses. The latest news in digital health delivered daily to your inbox. Meanwhile, etectRx, a competing ingestible adherence tracker system, announced its FDA clearance last month within a day of Proteus’ struggles coming to light. And of course, in October 2018 it signed onto the (now adjusted) $88 million deal with Otsuka. Exclusive interviews with industry leaders, profiles, and premium tools, like our CRISPR Trackr. Proteus’ CEO, Andrew Thompson, told STAT News that the company and Otsuka Pharmaceutical have ended a […] To access this post, you must purchase Free … But investors have noted that while the approach is promising, it has historically been a challenge to marry the digital and pharma sectors. Proteus Digital Health has a $15 million "stalking horse" offer from the American unit of Otsuka Pharmaceutical, which is a fraction of the company's onetime $1.5 billion valuation. (Natee Meepian/Getty Images), CMS Doubles Down on CAHPS and Raises the Bar on Member Experience. The company has raised more than $500 million in venture capital from a mix of technology investors, family offices and pharmaceutical giants like Novartis. WT | Wearable Technologies is the pioneer and worldwide leading innovation and market development platform for technologies worn close to the body, on the body or even in the body. According to the legal filing, the company has $100 to $500 million in assets and $50 to $100 million in liabilities. But in recent months, it has struggled to raise additional financing, and furloughed the majority of its employees for two weeks in November 2019, CNBC previously reported. Learn on-demand, earn credit, find products and solutions. Proteus Digital Health CEO Andrew Thompson. “Rather than a premature end to the agreement, it’s more of an evolution of the original agreement that allows each company to independently advance the development and commercialization of digital medicine offerings,” the representative wrote. As part of the deal, Otsuka invested $88 million in the company. STAT+ is STAT's premium subscription service for in-depth biotech, pharma, policy, and life science coverage and analysis. Tokyo, Japan and Redwood City, Calif. – November 14, 2017 – Otsuka Pharmaceutical Co., Ltd. (Otsuka) and Proteus Digital Health (Proteus) today announce that the United States Food and Drug Administration (FDA) has granted the first approval of a digital medicine system, ABILIFY MYCITE ® (aripiprazole tablets with sensor), a drug-device combination product comprised of Otsuka’s oral aripiprazole tablets … A spokesperson said that "filing for bankruptcy protection allows Proteus to continue its sales process in a more concerted and efficient manner while continuing to run the business as usual.". Otsuka is Proteus' largest shareholder, with a 19.3% senior preferred stake, according to case documents. January 2020. The move will allow Proteus to reorganize its business structure and pay down its debt without closing down. STAT+ is STAT's premium subscription service for in-depth biotech, pharma, policy, and life science coverage and analysis. Proteus Digital Health has filed for Chapter 11 bankruptcy protection, according to a filing late Monday. Proteus Digital Health filed for Chapter 11 bankruptcy protection June 15 and will now be acquired by Otsuka Pharmaceutial. Got a confidential news tip? Otsuka handed Proteus $88 million in a mix of equity and other payments to help fund a portfolio of new digital medicines focused on mental health, including continuing commercial work for the sensor-laden Abilify MyCite pill approved by the FDA in 2016. Proteus, founded in 2001, develops ingestible sensors and a wearable sensor patch to track medication-taking behavior. Subscribe to FierceHealthcare to get industry news and updates delivered to your inbox. Proteus Ends Deal with Otsuka, Refocuses on Oncology and Infectious Diseases Treatment. Proteus Digital Health and Otsuka Pharmaceutical have expanded their partnership on digital therapeutics. The pharmaceutical company has now acquired the full license for Proteus’ mental health treatment adherence technology, and will be independently pursuing development for these types of therapies, a representative from Otsuka told MobiHealthNews in an email statement. Here’s what stands in the way of their broader adoption, 9 leading names in digital health weigh in on the biggest barriers facing the industry, The most comprehensive industry coverage from a powerhouse team of reporters, Daily newsletters to brief you on the most important industry news of the day, Weekly opportunities to engage with our reporters and leading industry experts in live video conversations, Premium access to subscriber-only networking events around the country, The most trusted and well-connected newsroom in the health care industry. A collaborative team comprised of Otsuka and Proteus employees will be dedicated to commercial development and market coordination for the ABILIFY MYCITE System, software integration and standardization, manufacturing and supply chain integration, and coordination. Smart pill maker Proteus Digital Health on Monday filed for Chapter 11 bankruptcy, the latest sign of trouble at the Silicon Valley company that was once seen as a showcase for how technology can revolutionize how patients take their medicine. A new therapeutic focus is just the latest development in the digital health pillar’s shifting story. All Rights Reserved. CVS Health's programs to address COVID-19 have "expanded the universe of people" using its services, CEO Larry Merlo told investors Friday. Proteus was one of the first digital health "unicorn" companies. There is a potential deal on the table for Proteus Digital Health to exit bankruptcy in a $15 million sale to Otsuka Pharmaceutical. Although he did not specify the number of employees being affected, he did tell the news outlet that a 292-person count cited in prior reporting was “much, much larger” than what the company is planning. “Our digital medicine businesses have evolved to a point where we can maximize success by pursuing future opportunities independently and we are excited for both organizations moving forward. As part of the deal, Otsuka invested $88 million in the company. With half a billion dollars invested, the company had failed to create a sustainable business model, he said. Use a + to require a term in results and - to As part of the asset purchase agreement, Otsuka will buy Proteus' information technology assets, intellectual property, and equipment, including equipment used to design and manufacture wearable sensors.
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