Wednesday roundup: Owlet BabySat monitor clears FDA; Rosarium Health seed $1.7M led by Rock Health; Optum Startup Studio shuts; CareRev lays off 100, changes CEOs; pet telehealth Fuzzy shuts, leaves workers and vendors in lurch

June 21, 2023 | by

Owlet’s BabySat medical pulse-oximetry device receives FDA clearance. The wire-free sock design connects to a mobile app and tracks pulse rate and oxygen saturation level. The app alerts parents and caregivers when those readings fall outside ranges set by a physician. Launch is projected for later in 2023. Unlike other Owlet socks and systems, it will be by physician prescription only for babies that the doctor determines should have additional monitoring at home. There is a button for interested consumers (and presumably clinicians) to be notified of release information. Owlet release, Owlet product page, Mobihealthnews.  The original Smart Sock continues to be offered as a consumer product outside of the US and Canada. Owlet’s Dream Sock tracks non-clinical quality sleep quality indicators, including heart rate, average oxygen, wakings, and baby movements. In December 2022, FDA accepted Owlet’s de novo application for an enhancement to Dream Sock that provides heart rate and oxygen notifications in addition to sleep monitoring tools [TTA 18 Mar]. Perhaps these mean a turnaround is in the offing in this now much smaller company. They received a $30 million private placement lifeline in February, but the stock on the NYSE, while rising, is still well below $1. [TTA 16 May].

Rosarium Health receives a pre-seed round of $1.7 million from Rock Health and two other investors. It’s surprising because Rosarium is in the business of medically necessary home modifications to enable safe aging at home. Not your typical digital healthy, sexy, techy, buzzy Rock Health investment. But one that bears a few important checkmarks: since 2019, the Centers for Medicare & Medicaid Services (CMS) has covered home modifications in two different programs: Medicare Advantage (MA) through supplemental benefits, and Medicaid, through Medicaid Waivers (Section 1115 Waivers) or Medicaid Managed Care programs. In the current environment, that assurance of payment makes it most attractive indeed. Rock Health was joined by Primetime Partners with participation from Flare Capital. Rock Health release

Just when you think it’s getting better….

  • Optum Startup Studio fades to black–report. Startup Studio was Optum’s startup incubator and graduated over 100 early-stage companies that received mentorship and a chance to pilot their offerings through Optum’s companies and systems plus receive $25,000 to $50,000 in non-dilutive grant funding. The report in Axios attributed the program’s end to a reorganization within Optum that left mentors like Liz Selvig, who joined it in 2022, out in the cold. The timing could not have been worse for just-shuttered fertility planning startup Bunnii. Optum’s abandonment quickly killed interest from a potential lead investor who looked at Optum’s program and piloting as a vote of confidence. This Editor notes that the website and application pages are still live.  If this report is incorrect, we invite Optum to contact us.
  • CareRev, a short-term nursing/CNA staffing app platform, reportedly is laying off 100 employees or one-third of its staff. The same reports claim $100 million raised to date, but Crunchbase lists ~$50 million through a Series A in April 2021. Earlier this month, CareRev’s co-founder and CEO, Will Patterson, BSN, RN, resigned after The Information inquired on allegations that he used drugs and encouraged employees to try LSD and cannabis. CareRev subsequently named Brandon Atkinson, formerly COO of cardiac digital health Cleerly Health. Release. Becker’s
  • Fuzzy, a veterinary care digital health/e-commerce startup based in San Francisco, folded last week without paying employees or vendors. It raised about $80 million through a Series C from 2016. Backers included Icon Ventures, Greycroft, Crosscut, and Matrix Partners, private vet practices in the US, UK and Germany plus individual investors. Its $15/month subscription-based model included 24/7 live chat and telehealth, ship-to-home prescriptions, educational content, vet-curated pet items, and programs for nutrition, training, and obedience. The bad part: reports from employees on Twitter and Glassdoor indicated that the company stopped paying health insurance and salaries two weeks ago but were not formally notified of the company shutting until Saturday 16 June, and that vendors as well as contractors were misled on payment for weeks. The website is dark and CEO Zubin Bhettay’s LinkedIn profile plus Twitter handle are gone. Coverager

Owlet sock pulled from US distribution after FDA warning letter

December 4, 2021 | by

Awwww turning to Owwwww! High-flying Owlet has lost some altitude due to the consequences of a 5 October FDA warning letter. The outcome, at least for now, is that Owlet cannot sell its Smart Sock in the US. The Smart Sock measures sleep patterns, blood oxygen saturation, and pulse rate through pulse oximetry. FDA is now considering it a medical device that falls under 510(k) marketing clearance requirements, including premarket approval (PMA). Effective 22 November, the Owlet app will no longer be downloadable, although current owners who have downloaded the app for the Smart Sock and the Cam will not be affected. There are Owlets in the reseller pipeline, such as Amazon, which have now been rendered non-working. The Owlet Smart Sock can be sold outside the US, but not from the website.

What is surprising from the FDA letter is that they have had this issue with Owlet for five years. From the letter: “Since 2016, the FDA has corresponded with Owlet that the Owlet Smart Sock meets the definition of a device under the FD&C Act and does not fall under the compliance policy for low-risk products that promote a healthy lifestyle (General Wellness guidance).” The latter is a catch-all that has enabled various tech products to go to market with statements such as “not intended to diagnose, cure, treat, alleviate or prevent any disease or health condition”. It may have been either an escalation of monitoring capabilities, of marketing, or of the FDA deciding after the SPAC that Owlet needed to be treated differently. Owlet came to market in 2013.

Owlet’s letter to customers alludes to the FDA warning letter and that no safety issues were raised. They promise here and on the website that they will “transition to a new app and consumer wellness product that addresses FDA’s concerns”. The website continues to sell the Owlet Cam and Dream Lab, with ‘Coming Soon’ in January for the new Dream Sock and Dream Duo, but with no details. What’s not known are any details on their capabilities, whether they will fall under ‘general wellness’, and whether Owlet has begun the laborious and long process of filing as (likely) a Class II device.

Owlet enjoyed a SPAC during the summer [TTA 23 July] that nabbed it $135 million and a valuation of over $1 billion. It traded then at $8. Today’s close was $3.95. Its market cap is now less than half. It’s disappointing to this Editor that Owlet didn’t file with FDA well before the SPAC. They now have the opportunity to get FDA clearance, but the more likely outcome is that, at least for now, they will market a less capable device that falls under ‘general wellness’. Deseret News, FierceBiotech, CNET, The Verge