Proteus Digital Health (Proteus), a digital therapeutics company that develops sensors and wearables, which explicitly benefit patients by aiding them to track if they’re taking their prescriptions on time, needs a dose of funding which to help it survive in the industry.
The upheaval in the company comes after they failed to raise $100 Million in the recent funding round, CBNC reported citing the people familiar with the matter. To reserve cash, the California-based company furloughed a majority of its employees for two weeks in November. However, the employees were back on the floor after successfully landing $5 Million in funding, which is likely to last for a few weeks.
Since its inception in 2001, Proteus successfully raised almost $500 Million has capitulated its valuation to $1.5 billion. In 2010, Novartis announced plans to invest $24 Million to license the company’s technology for organ transplantation. Later, the Digital health startup collaborated with pharmaceutical the company, Otsuka, for a digital medicine system called AbilifyMycite to embed sensors in its pills. As a part of the deal, Otsuka agreed to pump in $88 Million into the company.
The digital therapeutics space has undoubtedly lured many investors but after several pharmaceutical giants walked away from partnerships, venture capitalists have lost confidence in such ventures. Proteus isn’t the only one dealing with thinning confidence, Pear Therapeutics, working in the same industry lost a key partnership with Sandoz, the generics division of Novartis.
“Proteus is currently conducting an operational review and restructuring our business to optimize effectiveness,” a company spokesperson told CNBC in an email. “We are taking into consideration the impact of our restructuring on employees, patients, customers, partners, and investors”.
Last year, Proteus kicked off its smart pill technology into the anti-psychotic drugs with Otsuka. The company also expanded its portfolio by pushing its technology into oncology. It introduced its digital cancer chemotherapy pill in 2017. Proteus has already partnered with Fairveiw Health Services and the University of Minnesota Health system to integrate its chemotherapy pills.
The full-fledged use of digital medicines can save up to $300 billion for the health care system. Most of the costs arose due to improper prescriptions, leading to unnecessary treatments. According to the 2018 survey, almost half of patients worldwide don’t take medications correctly. Such occurrences claim the lives of roughly 125,000 people in the U.S. annually.