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Brainstorm Health Daily: July 10, 2017

Good morning, readers—this is Sy. I hope you had a wonderful weekend. Let's get right into it.

This week is starting off with a veritable avalanche of health care news, from substantial new CEO hires to corporate biopharma battles to milestone new drug approvals (not to mention the continuing saga of Obamacare repeal in Congress).

But one story that caught my eye is the Department of Defense's decision to provide $65 million in funding to develop brain-machine interface technologies that could, one day, lead to major medical breakthroughs in hearing, vision, speech, and other brain-related disorders.

The funding comes in the form of Defense Advanced Research Projects Agency (DARPA) contracts under the agency's Neural Engineering System Design (NESD) program, part of a variety of projects meant to support former President Barack Obama's BRAIN initiative. The contracts have been awarded to Brown University, Columbia University, The Seeing and Hearing Foundation, the John B. Pierce Laboratory, Paradromics Inc, and the University of California, Berkeley, DARPA announced Monday.

"The NESD program looks ahead to a future in which advanced neural devices offer improved fidelity, resolution, and precision sensory interface for therapeutic applications," said NESD program founder Phillip Alvelda in a statement. "By increasing the capacity of advanced neural interfaces to engage more than one million neurons in parallel, NESD aims to enable rich two-way communication with the brain at a scale that will help deepen our understanding of that organ’s underlying biology, complexity, and function."

You read that right: These companies' and academic organizations' goal is to create neural links that can communicate with more than one million neurons. But as impressive as that sounds, it's still just a tiny fraction of the 86 billion neurons in the brain. For now, the NESD's mission is to uncover data relating to sensory functions like eyesight and hearing and create a basic foundation for brain-machine technology.

That will involve myriad complications, technological, biological, and regulatory alike. Which is why DARPA has chosen a range of grant winners focused on various aspects of the project, such as creating implantable devices that help restore speech or building a "holographic microscope" that can keep track of one million neurons (you can check out the full list of contracted firms and their initiatives here). Down the road, the NESD will collaborate with regulators like the Food and Drug Administration (FDA) to discuss possible clinical trial procedures in humans.

While this may be one of the first major public-private partnerships for brain-machine interfaces, the private sector has already been chasing the science fiction-like dream. Eclectic billionaire entrepreneur Elon Musk made waves earlier this year when he announced that his latest venture, Neuralink Corp, is working to connect the brain with a computer interface within the decade.

Read on for the day's (many, many other bits of) news.

Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

DIGITAL HEALTH

Digital health is headed for its biggest year ever. Digital health investments are on track to set an all-time record in 2017, according to a new report from StartUp Health. In the second quarter of the year alone, companies focusing on everything from data analytics to personalized medicine/genomics to 3D printing technologies and wearable sensors raised $3.8 billion. That's more than the total raised in 2010 and 2011 combined, according to the report. At the year's halfway point, the digital health industry received more than $6 billion in investments, with deal sizes continuing to grow. Some of the biggest cash hauls this year have been Grail ($914 million Series B round), Outcome Health ($600 million venture round), and Guardant Health ($360 million Series E round). (StartUp Health)

Medtronic tested out the world's smallest pacemaker in space. It worked. As we've previously reported in the Daily, medical device giant Medtronic recently set out to test Micra, a one-inch long device which the company calls the world's smallest pacemaker and which doesn't contain any leads, in space to see how it fares against high radiation, temperature fluctuations, and gravitational forces during space travel. The results are in and Medtronic says that the Micra more than held its own in an unmanned rocket launch that actually subjected the machine to particularly extreme conditions. "In some ways this is well beyond what they’d ever send an astronaut into. So to know that Micra was still operating properly after all that is a really good feeling," said program manager Wade Demmer in a statement.

INDICATIONS

Another biopharma vet joins Vivek Ramaswamy's Roivant umbrella. Vivek Ramaswamy, the 31-year-old who has set out on an audacious biotech project with his umbrella corporation Roivant Sciences, has snagged another biopharma veteran to head one of his company's member firms. This time, it's former Celgene president and COO  Dr. Jacqualyn “Jackie” Fouse, who will be helming Dermavant—a private Roivant company focusing on dermatology drugs. There are now five different "vants," some public, some private, which are tackling everything from women's health to rare diseases to Alzheimer's. And Ramaswamy has managed to recruit an impressive stable of chief executives for them (more on that later).

Should McKesson's CEO have taken a haircut over the opioid crisis? At least one major McKesson shareholder thinks that the drug distribution giant's CEO should have faced a cut in bonus pay over its potential role in fueling the opioid crisis, writes my Fortune colleague Erika Fry. McKesson has defended itself by arguing that it's "doing everything we can to help address this crisis in close partnership with doctors, pharmacists, government and other organizations across the supply chain." (Fortune)

FDA approves first new sickle cell drug in decades. The Food and Drug Administration approved the first new treatment for sickle cell disease in nearly 20 years last Friday. The therapy, Endari, is the product of little-known biotech Emmaus Medical Inc. "Until now, only one other drug was approved for patients living with this serious, debilitating condition," said the FDA's Dr. Richard Pazdur in a statement. The drug isn't a cure; but it does treat some of the debilitating symptoms of sickle cell disease and reduced hospitalizations in clinical trials.

THE BIG PICTURE

What happens when you want to leave the hospital against the doctor's wishes? The New York Times is out with a fascinating look at a baffling medical dilemma: If a patient wants to leave the hospital but his or her caregivers disagree with that decision, what do you do? In many cases, those patients will have to pursue a special sort of discharge form in which they acknowledge their risks. There may be a financial incentives for hospitals to keep certain people in overnight, too, since providers can face penalties for readmitted patients. But patient advocates argue it should still ultimately be their own choice, and that hospital stays are extremely costly. (New York Times)

The Senate is back in session. We still don't know how it will deal with Obamacare. Now that lawmakers are back from their July 4th recess, the Senate must contend with the issue that's been confounding all of Congress for months: What to do about Obamacare? Reuters and other outlets report that resistance to current Senate proposals only grew during the recess in the face of angry constituents at town halls and several polls indicating the legislation is deeply unpopular. Top Senate Republicans have said they doubt a vote will be possible before the end of the month. The CBO is currently analyzing two versions of the Senate bill, one of which includes conservative amendments that could potentially roll back more Obamacare regulations. (Reuters)

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