‘Digital pill’ maker Proteus Digital Health files for bankruptcy
Proteus Digital Health, the maker of an ingestible sensor for tracking medication adherence, filed for Chapter 11 bankruptcy protection on June 15, 2020. In addition, Andrew Thompson stepped down as the company’s CEO, replaced by Lawrence Perkins of SierraConstellation Partners, who had previously been hired as Proteus’s chief restructuring officer.
“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,” Proteus said in a statement provided to MobiHealthNews.
The news didn’t come as much of a surprise to industry insiders, who saw Proteus furlough much of its staff, reassess its partnership with Otsuka Pharmaceutical, and pivot away from its primary focus area of mental disorder treatment.
Proteus’ main product is Abilify MyCite, a sensor-enabled version of Otsuka’s schizophrenia drug.
The major question going forward will be whether Proteus’ failure was a result of its technology or its business strategy. A few months ago, when signs of trouble at Proteus were just starting to emerge, Rock Health Managing Director Bill Evans told MobiHealthNews the company probably “shouldn’t have put all their eggs in one basket,” and doubly so when that basket is patients with schizophrenia, a population “uniquely distrustful” of tracking devices.
“Proteus may have picked [a] therapeutic area with a degree of difficulty that’s an eight or nine out of 10, right?” Evans said at the time. “They may be paying the price for that tactical choice, because it’s such a challenging therapeutic modality for their particular intervention to take hold. If that’s true, it’s unfortunate, but it doesn’t disprove the value of Proteus itself. It simply means that the evidence is yet to be seen.”
However, some reports on Proteus’ problems over the past several months mention shortcomings in the company’s early clinical-validation data. A lack of supporting evidence would likely put off potential investors or cause prior backers to stop funding the company.
Whatever the reasons for Proteus’ bankruptcy, demand for digital health products and services is still strong overall. Rock Health data shows that Q1 2020 was a record-breaking quarter for digital health funding. At least one digital health company is planning an IPO this fall as well.
Read the full story here.