By Sy Mukherjee and Clifton Leaf
October 27, 2016

Venture and private equity investors poured nearly $2.4 billion into digital health firms around the world during the third quarter of 2016, according to StartUp Health Insights’ latest funding report. That’s significantly more than what was invested during the comparable period last year ($1.9 billion)—and the pace so far in 2016 (a hefty $6.5 billion has been invested through Sept. 30), suggests we’re headed for a record year in funding.

Not everyone agrees, of course, on what counts as a “digital health” enterprise and other sector-watchers have estimated lower numbers of deals and dollars flowing in. But whatever the precise tallies may be, StartUp Health’s dissection offers some eye-grabbing details—particularly about where all that seed and series funding is going.

The firm, for example, has tracked 33 deals this year—worth more than $900 million in sum—with companies that focus on “wellness.” The category is a bit of a catchall—which, in StartUp Health’s estimation, includes upstart insurers that claim to reduce hospital admissions by keeping their customers healthier. But the numbers suggest a bigger and broader trend.

Indeed, it’s one we’re going to explore in-depth at Fortune’s inaugural Brainstorm Health conference, which begins on Monday in San Diego. We’ll probe the science of aging with Nobel laureate Elizabeth Blackburn, talk meditation with Deepak Chopra, and learn—in a discussion with Thrive Global CEO Arianna Huffington—how the genuine promotion of wellness can revolutionize the workplace.

Dr. Sanjay Gupta will delve into the human brain with leading neurologists Adam Gazzaley and Richard Caselli, and we’ll discover how to strengthen and preserve this mysterious organ. We’ll dive into our “second brain” in the gut—a synergistic ecosystem of trillions of bacteria that has more to do with our well-being than many comprehend. We’ll dive into the new “exercise cure”—the high-tech science of fitness—and see what 21st century prevention really means. And we’ll talk about how to fight pain—and an epidemic of opioid addiction that has struck nationwide.

Those who can’t be with us in person, fret not—You can still be with us virtually. We’re livestreaming much of the conference (details are here) and I’ll report back from the field.

More news below.

Clifton Leaf
@CliftonLeaf
clifton.leaf@fortune.com

DIGITAL HEALTH

GE Healthcare and Johns Hopkins have created a digital hospital command center. Imagine being able to have a bird’s eye view of everything going on in a major hospital combined with a constant stream of detailed data about every significant event. Combine that with predictive analytics and you’d get the Judy Reitz Capacity Command Center at the Johns Hopkins Hospital. The command center, which was built in collaboration with GE Healthcare Partners, serves as a centralized hub for the hospital that can be used to maximize efficiency and reduce risk, according to GE. That might mean using the system to foresee an influx of patients who need beds, and anticipate the best way to allocate resources to sick people. And it’s already been showing results, according to the hospital, including significant boosts in early discharges and a far greater capacity to take in patients from other hospitals. “In the past, like most hospitals, we were dependent on traditional technology—phones, email and IT systems—to manage the hospital, assign beds, etc.,” said Mary Margaret Jacobs, director of patient/family and visitor services for the Johns Hopkins Hospital, in a statement. “The Capacity Command Center brings the latest high-tech tools into a NASA-like control center here at our hospital.”

23andMe ditches next-gen gene sequencing project. There can be such a thing as too much information, at least in certain circumstances. At least that’s the takeaway from Anne Wojcicki and her gene sequencing firm 23andMe, which is scrapping a next-generation sequencing project because it simply gives customers, who receive their genomic results through 23andMe’s mail-order service, too much complex data for them to realistically use. The information would be much more useful in the hands of a physician—but Wojcicki isn’t interested in going down that route. “Without a doubt we are a consumer product. We’re not going through a physician. There is no other company out there that is direct to consumer,” she said during the Wall Street Journal’s D Live conference. (Fortune)

The company that wants to make taking your meds as easy as breathing. OptiNose, a biopharma company with U.S. offices in Pennsylvania, wants to use the body’s own natural mechanisms to make a better drug delivery devise. The firm’s take on an inhaler delivers drugs further up the nasal cavity and leads to more absorption by taking advantage of the way your soft palette moves while you’re breathing. OptiNose already has an approved product for migraines and has conducted late-stage trials for treating chronic sinusitis, a burdensome inflammatory condition that can make it hard to breathe and sleep. (Fortune)

FDA concerned about lack of device-related injury and death reporting. The Food and Drug Administration said in a blog post this week that it will be working with hospitals to boost adverse event reporting on medical devices. The agency concluded through a series of inspections that many hospital staff didn’t actually know the proper FDA protocols when it comes to medical device-related injury or illness, such as contaminated endoscopes which can make patients sick. (FierceBiotech)

 


INDICATIONS

Mylan’s pricey EpiPen could soon have a competitor. Private biopharma firm Kaleo is about to give the EpiPen a run for its money, hoping to capitalize on controversy over Mylan’s massive price hike for the life-saving, allergic reaction reversing device. The company announced Wednesday that its own epinephrine injector, Auvi-Q, would make a return to the U.S. market in 2017. The product was actually already available once but recalled last year due to concerns that it wasn’t delivering the right dosages of drug. What’s unclear at this point is just how much it will cost, and how much cheaper it will than the EpiPen (which will be available in a cheaper generic form soon, according to Mylan.) (Fortune)

Humana will cover Sarepta’s controversial Duchenne drug, but with a catch. The FDA’s most controversial drug approval of the year, for Sarepta’s Exondys 51, has galvanized patient advocates and the regulators’ staff scientists alike. The first-ever treatment cleared for the devastating rare disease Duchenne muscular dystrophy had an unconventional path to an accelerated approval, with higher-ups at the FDA overturning the recommendations of their own scientific advisers and staff against approval over efficacy concerns. But rare disease advocates and Duchenne patients launched a powerful lobbying campaign that ultimately swayed the FDA’s Dr. Janet Woodcock, arguing that there was little harm and enough hope in approving even a modestly effective treatment for a condition that had none. However, Sarepta hit a road bump when insurance giant Anthem said it would not cover the pricey therapy for its plan holders because it didn’t consider Exondys 51 to have proven efficacy. Now, another major insurer, Humana, has chosen to go a different route. The drug will be covered for Humana’s customers as long as they are proven to have the specific form of Duchenne that Exondys 51 is cleared to treat. (BioPharma Dive, Fortune)

Bristol-Myers Squibb announces “evolution” of operating model, R&D. Pharma giant Bristol-Myers had a curious line in its third quarter earnings report, released Thursday morning. It touts a “new operating model” that involves “a more focused investment in commercial opportunities against key brands and markets, a competitive and more agile R&D organization that can accelerate the pipeline, streamlined operations and realigned manufacturing capabilities that broaden biologics capabilities to reflect current and future portfolio.” It’s not totally clear what this transformation could look like—but it’s not surprising that the company is trying to shake things up after taking a hit from investors following disappointing results for its star cancer immunotherapy drug Opdivo for lung cancer patients, as Endpoints notes. (Fortune)

Allergan continues its string of biotech buyouts. Allergan chief Brent Saunders seems like he’s determined to single-handedly snatch up every biotech in the country. Well, that’s a bit of an exaggeration—he has an established strategy of buying firms with late-stage products armed with solid clinical trial data and blockbuster potential. And he’s done it again, striking a $247 million deal to gain a gut drug the company thinks could bring in massive sales, according to John Carroll. Not all analysts have been enamored with Saunders’ strategy, though. Allergan raised some eyebrows when it paid a spectacular premium to purchase Tobira, which has an experimental liver disease drug. (Endpoints)

 


THE BIG PICTURE

Where the elderly die can vary by region. Researchers have published new findings on how much time the elderly spend in nursing homes and hospitals, rather than at home or with their families, before dying in the New England Journal of Medicine. And the results reveal widespread geographic disparities, with those in the Rockies and the Gulf Coast spending more time in such facilities compared with the elderly in the Midwest, for example.  (Wall Street Journal)

St. Jude Medical shareholders give $25 billion Abbott buyout the green light. St. Jude Medical shareholders overwhelmingly voted to approve the $25 billion buyout of medical device giant Abbott, with 99% of them approving during St. Jude’s annual meeting. While the two organizations still hope to close the deal by year’s end, it still has to pass regulatory muster in both the U.S. and Europe. (Mass Device)

Employers continue to shift health costs onto workers. A new study by Mercer finds that employers’ costs for their workers’ medical benefits rose at an extraordinarily low rate of 2.4%. But employees are still paying a greater share for their medical care thanks to a continuing rise in the use of high-deductible health plans. In recent years, employer-sponsored insurance plans have seen relatively modest premium inflation—a stark contrast to the steep hikes set to go into effect for many individual insurance plans sold on Obamacare’s marketplaces.  (Kansas City Star)


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