Often entrepreneurs are describing their new company as a digital health start up, but what exactly is digital health?  Some incorrectly think it is anything medical with a website or connected to an iPad.  In his book, The Fourth Wave, Paul Sonnier describes it as “the convergence of the Digital and Genomic Revolutions with health, healthcare, living and society.”  That same definition is how Wikipedia now describes it.  In practice, digital health includes categories such as mobile health (mhealth), health information technology (HIT), wearable devices, telehealth and telemedicine, and personalized medicine. 

mHealth is the actual delivery of healthcare services via a mobile communication device.  mHealth is very much related to telehealth and telemedicine where healthcare services can be provided remotely through the use of telecommunications technology.  Wearables generally incorporate some combination of the three above but obviously fit on the body.  HIT lies in the same realm as these others but includes electronic prescription writing, electronic health records, personal health records and software or hardware for storing, sharing and analyzing health information.  Finally, personalized medicine is the outlier as it involves using information from one’s genetic profile, environment and more, to prevent, diagnose and treat their diseases.  All together there is a common goal, improving healthcare and health outcomes by utilizing information technology. 

Smartphones, social networks and the internet have changed our lives.  They connect us, they teach us, they entertain us, and now they can help us track our health and wellness. This helps patients, healthcare practitioners, scientists, device developers and manufacturers and more.  But with great power comes great responsibility. 

As with everything in the life sciences, the FDA is actively involved with the regulations for digital health product development, and that is good for new product developers.  FDA is excited about all these advances and they are working closely with industry.  Because of the intersection of technology, product and consumer companies, many are new to a regulated environment.  The 21st Century Cures Act has clarified FDA’s regulation of medical software and now FDA has three guidance documents to clarify FDA’s position specifically on digital health products.  Finally, with the Digital Health Innovation Action Plan, FDA works to further clarify items specifically for manufacturers. 

There have already been quite a few transactions in the digital health space and we expect many more.  In 2017 alone, we saw: 

• CoverMyMeds acquired by McKesson – $1.1B in cash plus a contingent $275M 
• Jiff acquired by Castlight Health – up to $135M in stock 
• EveryMove acquired higi – undisclosed amount 
• Digital Pharmacist acquired PocketRx – undisclosed amount 

Also, a few years back, Locust Walk acted as an advisor to Otsuka on their collaboration with Proteus Digital Health, one of the early digital health collaborations with a pharmaceutical company.  That collaboration recently led to the approval of Abilify Mycite (aripiprazole tablets with sensor), a drug-device combination product.  This will help healthcare providers, caregivers and families to track a patient’s compliance.  It also likely opens the door to more such approvals now that the pavement has been paved. 

At Locust Walk, we are excited about digital health and have already been involved with material transactions in the space.  Our highly skilled team is constantly learning to be best prepared for our clients.  If you work at a digital health company and are looking for transactional and/or commercial support to help grow your company, please contact me at stewart@locustwalk.com.