23andMe drops drug discovery group, expands Lemonaid into GLP-1 weight loss medications, loses $69M in Q1–and board rejects CEO’s buyout offer

August 14, 2024 | by

Troubled 23andMe disbands drug discovery group, moves into weight loss meds, loses $69 million in FY25 Q1–and soundly rejects CEO buyout offer. The next shoes have dropped in the 23andMe drama.

The latest from both the Q1 earning announcement and their SEC filing, both 8 August:

  • 23andMe has abandoned its drug discovery dreams and closed the unit, terminating 30 employees in the Therapeutics Discovery unit including Bill Richards, the head of Therapeutics Discovery (package details in the 8-K), effective 9 August.  SEC Form 8-K 
  • 23andMe will retain their Therapeutics Development unit for the two drugs currently in early-stage clinical trials. They are also collaborating with Nightingale Health to pilot a metabolomics blood biomarker panel with a cohort of 23andMe+ members.
  • The Lemonaid telehealth unit is moving into prescribing GLP-1 semaglutide weight loss drugs through a membership program and receive either brand-name or compounded medications. (Editor’s note: why anyone would be a member of 23andMe after their epic user and member data breach last year–that they blamed on users’ passwords–is beyond me.)
  • This is coupled with what the company terms in its Q1 press release “a large-scale genetic research study to help identify the genetic mechanisms that may drive the efficacy and potential side effects of GLP-1 medications”

Their Q1 FY 2025 was singularly depressing, with revenue sinking 34% to $40 million, well below the $52 million projected by Street analysts. The drop was attributed to the loss of the GSK genetics collaboration in mid-2023.  The only bright spot was that losses also shrank 34% to $69 million from $105 million in the prior year. 

Stock delisting pending. ME closed on Tuesday at $0.35. The company received an extension from Nasdaq to 4 November and is seeking shareholder approval for a reverse stock split to raise the price above $1.00 as required. Endpoints, MedWatch, FierceHealthcare

CEO’s buyout rejected. On 2 August, the $0.40 per common share non-binding offer from CEO and controlling shareholder Anne Wojcicki offered on 29 July [TTA 1 Aug] was soundly, roundly rejected by the impressively named Special Committee of the Board of Directors of 23andMe. From the letter:

“We are disappointed with the proposal for multiple reasons, including because it provides no premium to the closing price per share on Wednesday, July 31st, it lacks committed financing, and it is conditional in nature. Accordingly, we view your proposal as insufficient and not in the best interest of the non-affiliated shareholders. Therefore, we are not prepared to move forward under the terms provided. Importantly, we request that you immediately withdraw your stated intent to oppose any alternative transaction so that we can fully assess whether there is interest from third parties in a transaction that would maximize value for all shareholders.” (Editor’s emphasis)

It closes with a demand:

“In the absence of a revised offer at a more appropriate price per share that meets the other requirements set forth above, we will pursue other alternatives in striving to maximize value for all shareholders. In that regard, given both the lack of certainty regarding a path forward with you and your potential investors and the current liquidity position of the Company, in parallel with your work to submit a revised bid, we intend to immediately begin the process of engaging a consultant to advise the Special Committee on a revised business plan that would provide the Company with a path to a more sustainable financial profile and achieving profitability. In your capacity as CEO, we expect your full support in these efforts.“

Given that she reportedly holds 22.5% of the company’s outstanding Class A common stock and 59.2% of outstanding Class B common stock (according to analyst TD Cowen)–other reports state that she has in total 49.99% of the voting power–that is quite a defiant statement. Based on her supervoting privileges–a trick picked up from her Silicon Valley tech friends back when–Wojcicki could kill any buy not in her interest. Or any interest, period. Developing.  

Monday roundup: Envision files Ch. 11, who’s to blame for Meta Pixel abuse?, CVS Health to shut clinical trials unit, Amino Health scoops $80M, DocGo flat but optimistic, Owlet way down in revenue

May 16, 2023 | by

What was envisioned last week came to pass for Envision Healthcare on Sunday. The hospital and physician staffing company filed for Chapter 11 reorganization five years after it was taken private by investment company KKR. At the time of that massive buyout, the value of the company was pegged at $10 billion. Things started to go south for Envision after 2020 with the pandemic drying up patient volumes for two years, with the added factors of regulations kicking in on ‘no surprise’ billing, inflation, staffing shortages, and major fights with health plans around out-of-network inflated charges plus a huge claims dispute with UnitedHealthcare [TTA 12 May]. Ironically, Envision won the main dispute with UHG; that $91 million won in arbitration in an insider’s view would have staved off the bankruptcy this year.

KKR will apparently lose its $3.5 billion equity in the company as $8 billion in debt restructuring takes place. What’s before the court is that the Envision staffing operation will be separated from the AmSurg surgical clinics. Senior lenders will have their debt rearranged into equity into one or the other company. Junior lenders, bondholders, and KKR will receive zero, or as we say locally, bupkis. It’s envisioned (sic) that the restructuring will take about three to four months.  Financial Times, Envision release

The hospitals, that’s who! If you believe Meta, it’s the hospitals that abused those poor Pixels, making them do things against their wishes to tattle all sorts of PHI and PII to Big Bad Meta which sends patients all those Nasty Intrusive Ads. Meta is being sued by parties from the ACLU to patients in class action lawsuits on how the Pixel was used on hospital patient portals and scheduling websites. Meta’s argument is that the health systems’ developers could but did not control how the ad trackers were used and that “Meta did not implement or configure” the Pixels used on the health systems’ websites. In fact, Meta claims that they have filtering tools that screen out sensitive data and that would alert the developer. “It’s ultimately the developer, not Meta, that controls the code on its own website and chooses what information to send,” according to the May 5 filing in that busy US District Court of Northern California.

This could influence outcomes in the multitude of lawsuits being filed against health systems like Kaiser Permanente, UCSF Health, and LCMC Health in New Orleans plus Willis-Knighton Health in northwest Louisiana (Healthcare Dive). If the District Court finds that Meta, and possibly other ad trackers such as those from Google, Twitter, or Bing were not inherently liable for personal health data violations that monetized PHI, then the health systems are 100% on the hook for the data breaches (or ‘wiretapping’ in a creative use of terminology). It also makes the potential paydays possibly less lucrative–in the eyes of this Editor, as Meta and Google have far deeper pockets than any ol’ health system. SC Media, Paubox   The Meta Pixel backstory here

CVS Health to shut its clinical trials unit by December 2024. CVS, like Walgreens and Walmart, jumped into the clinical trials business during the Covid-19 pandemic, seeing a need in the market with pharmaceutical companies and a ready-made, 100 million deep diverse base of patients among their pharmacy users. CVS cited to Healthcare Dive that the shutdown was to better concentrate on core business. Current active trials on the website include narcolepsy, rheumatoid arthritis, and kidney health. No disclosure as to profitability but CVS has a lot to digest with new buys Signify Health and Oak Street Health.

Amino Health’s $80 million funding is a bright spot in this sideways spring. With a digital guidance model that works with employers and health plans to help 1.6 million members navigate their care, their new funding will be used for technology scaling. Equity and debt financing were led by Transformation Capital, which will be joining the Amino board, and Oxford Finance LLC. Amino is being boosted by the Federal Transparency in Coverage (TIC) Rule which makes pricing disclosure a key part of plan navigation. Amino originally started with a direct-to-consumer model but shifted to enterprise, including brokers and third-party administrators. Amino’s total raise is now $125 million (Crunchbase). Mobihealthnews, Amino release

DocGo’s two services, mobile health and medical transport, essentially swapped revenue this quarter in a better-than-average picture. Their mobile health services area in Q1 fell 19% to $72.9 million from $90.1 million in Q1 2022, while transportation services grew 44% to $40.1 million from $27.8 million in Q1 2022. This added to total revenue of $113 million with a net loss of $3.9 million. Their 2023 revenue guidance remains at $500-$510 million with adjusted EBITDA guidance of $45-$50 million. 

What’s promising here is that it’s a SPAC that didn’t crack like practically every other. DocGo pointed out in their release that they have a backlog of $205 million in total contract value over approximately three years and they have doubled their RFPs. Their patient target for 2023 is 50,000. Share price today on Nasdaq ticked up to $8.77. Considering their high last year of $11.08, they are not doing badly in this time at all. Mobihealthnews .We last saw DocGo providing mobile clinics in a Tennessee pilot with Dollar General [TTA 24 Jan] which now is tied in with the state of Tennessee, plus a pilot in NY and NJ with Redirect Health. They provide services in 26 states and the UK.  

This Editor is trying to be as cheerful as the baby at left about baby sock/monitor Owlet, which has had a rough ride in the past two years. Their revenue dropped to $10.7 million in Q1 2023 versus $12 million in Q4 2022 and $21.5 million in Q1 2022. Owlet ended 2021 with a nastygram from the FDA that pulled their original Smart Sock off the market [TTA 4 Dec 2021] but rebounded early in 2022 with the Dream Sock and Dream Duo [TTA 16 Feb 2022] that avoided the claims that sent them into 510(k) Marketing Neverland.  Still, they were delisted by the NYSE in December 2022. On the positive side, Owlet wound up 2022 with $69.2 million in revenue and a good-sized private placement of $30 million in February [TTA 18 Mar]. It has submitted to FDA for two products, including the steep de novo climb on an enhancement to the Dream Sock. Now a much smaller company than it was last year, they have reduced operational expenses to $15.1 million from $24.1 million in Q4 2022 to get to breakeven by end of this year and to be relisted on the NYSE in the future. Having followed them since the early ‘telehealth for the bassinet set’ days of 2012-2013, this Editor wishes them bonne chance. Owlet release, Mobihealthnews

COVID-19’s negative impact on clinical trials–can remote patient monitoring and telehealth companies help?

September 30, 2020 | by

We’ve previously noted the interest of large drug clinical trials companies in remote patient monitoring–example the acquisition of the much-passed-along Care Innovations by PRA Health Sciences [TTA 8 Apr]. Logically, these clinical trials have been hampered by the COVID-19 pandemic, affecting recruitment, data sharing, preservation of data, and how trials can be conducted.

TMF Futures: Keeping Data Alive has just been published by Arkivum, a University of Southampton (UK) spin-out which specializes in the digital preservation of valuable data for the life sciences industry and global scientific institutions through the Arkivum Trust. This initial survey was conducted in July 2020 by Arkivum, Phlexglobal, the Ethical Medicines Industry Group (EMIG), and Survey Goo. The 206 senior representatives surveyed all have responsibility for/knowledge of clinical trials, with senior and director-level positions in general and senior management; regulatory; quality assurance; clinical; operations.

TMF refers to the trial master file that is required by FDA and EMA. Paper TMFs have largely converted to electronic form (eTMF). Life science organizations have also largely transferred data to eClinical applications. Despite that, the survey found that 45% of clinical research organizations (CROs) struggle to manage, locate and report data, while 50% are unable to convert documents from multiple software applications in order to make them usable. 

Topline findings of the survey:

  • 74% of respondents say that COVID-19 will continue to compromise their ability to deliver on clinical trial objectives for the next six to 12 months;
  • 70% say that COVID-19 has triggered a change in the way clinical trials will be conducted;
  • Interoperability between eClinical applications used in trials remains a major challenge – for example, 39% of all respondents and 50% of contract research organizations are unable to convert documents from multiple eClinical applications;
  • Current archiving of clinical trial data is not always fit for purpose – for example, 65% of compliance, legal, and regulatory professionals describe their ability to access data as ‘extremely inadequate’ or ‘very inadequate’.

Of interest to our Readers is page 11 of the survey, which found that 56% of respondents believe that there will be increased remote patient monitoring in post-COVID clinical trials, and that 22% believe that new technology will be developed to shorten clinical trial duration and reduce cost. In addition, recruitment has to come from more diverse areas and to mitigate the difficulty of finding people to be in clinical trials.

For telehealth developers, providers, and software developers who have the systems, data, and access to patients/users, clinical trials and CROs may be a strong future market. We may also have profitable insights into interoperability and data sharing.

To obtain a free copy of the survey, fill out the short form here. Arkivum press release. Hat tip to Penny Lukats of SENSO Communications (UK).

The Future of Clinical Trials in the Post-Pandemic Era: HITLAB Seminar Series 6 May

April 30, 2020 | by

Wednesday 6 May, 11am to 12 noon Eastern Daylight Time

How can virtual trials improve patient enrollment, retention, and engagement in a clinical trial? How much of the future CRO model will be defined by digital solutions? These are two questions key for many digital health companies as they expand and/or pivot their business model. Answering these questions will be the task of the panel discussing “Clinical Trials in the Post-Pandemic Era”, a free virtual midday seminar hosted by HITLAB in New York.

Panelists are: Joris van Dam, Head of Digital Therapeutics at Novartis, Natalia Kotchie, Vice President R&DS Applied Data Science Center at IQVIA, Bill Taranto, President & General Partner at Merck Global Health Innovation Fund, and Jeff Ventimiglia, Senior Vice President, Medidata Solutions (sponsor). The panel will be moderated by Professor Stan Kachnowski, Director of the Digital Health Strategy program at Columbia Business School.

Seats are limited to 1,000. Registration is necessary through Eventbrite here. Registrants will receive a follow-on email with instructions on how to access the webinar.

PharmaTech Innovations/Health 2.0 NYC Wed 19 July –speakers confirmed, reserve now!

July 17, 2017 | by

Wednesday, 19 July, 6-8:30 pm at Cohn Resnick LLP, 1301 6th Avenue, NYC

Health 2.0 NYC‘s July event examines innovation in the pharmaceutical business. It’s changing radically, from companies like PillPack which disrupt traditional pharmacies to apps that monitor clinical trials or prescribed as adjuvant therapies. Presenters on Wednesday night include:

  • Dan Conely – Managing Director, NJ Angels, active investor in drug discovery automation
  • Grace Cordovano, PhD – Enlightening Results – CEO and private cancer patient advocate. She founded Enlightening Results, LLC in 2010 to foster private, personalized patient advocacy services.
  • Jodie Gillon – Achillion Pharmaceuticals, Senior Director, Patient Advocacy and Professional Affairs

Early stage companies presenting: ClearRx. Other speakers/presenters to come. 

For $25, you get engaging speakers, beverages, food, and plenty of networking time amongst the like-minded and leaders in health tech! More information and registration on the Health 2.0 NYC Meetup page. (Disclaimer: Editor Donna is an event host and TTA is a long-time sponsor and supporter of Health 2.0 NYC) 

Google X develops health tracker–for research and clinical trials only

June 27, 2015 | by

And it’s not for sale. The life sciences group within Google X is testing on small groups a wrist-worn device which can sense with high accuracy pulse, heart rhythm, skin temperature and environmental information like light exposure and noise levels. Bloomberg News, which appears to have broken the story, quotes Andy Conrad, head of the life sciences team at Google: “Our intended use is for this to become a medical device that’s prescribed to patients or used for clinical trials.” Obviously it will be more accurate both in hardware and in back end algorithms than what’s currently marketed via Android Wear for smartwatches. Perhaps this is meant for the ‘superusers’ of healthcare services at the top 5 percent using 50 percent of spend, the new ‘It Girls’ of healthcare, TTA 28 May)? However, he’s also projecting out 20-30 years, so health systems and researchers, do not hold your breath waiting for this to become reality. (This is also a counter to Apple’s ResearchKit.) Also Yahoo Finance and The Verge, which has a gigantic photo of a smartwatch but no caption attribution. The Verge also mentions their research in MS. Gizmodo also adds that Mr Conrad is directing the Google X Baseline project, which is doing human testing and crunching data to develop a baseline of normal human health.

More about Google X in this video interview on Tested with Astro Teller (for real), ‘captain of moonshots’ for the company, on ‘thinking big and failing quickly’. (24 minutes)

Medivizor patient info site goes public with additional information

August 24, 2013 | by

Medivizor, which was one of the better discoveries of our CE Week (NYC) coverage and the H20NYC/Healthcare Pioneers evening back in July [TTA 3 July], has moved out of what was a largely private beta to what they interestingly term a ‘public beta’. The site provides individualized content, understandable by the layman, for subscribers on a larger group of diseases which were on track for this fall: lung, colorectal, breast, and prostate cancer, as well as melanoma, diabetes, coronary artery disease, hypertension and stroke. The goal is to improve doctor-patient communications by better patient education. Another important feature is a “personalized system for matching individuals with specific clinical trials available worldwide.” Company release, Xconomy article.

A related New York Times article is an appreciation of how physicians are overwhelmed by information and that “doctors also need a skilled docent to help walk them through all that curated data.”  Healing the Overwhelmed Physician