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InnovationRx: A New Low For Digital Health Deals

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Digital health venture funding data from the second quarter of 2023 shows deals “hit a new low,” according to an analysis released by PitchBook today. There was $900 million in digital health funding in Q2, compared to $1.2 billion in Q1. “[W]e don’t expect a material uptick in funding for at least the next several quarters,” writes PitchBook analyst Aaron DeGagne. The deals that are happening, he writes, tend to include existing investors and there’s also a greater trend toward debt financing. The bigger picture context: in 2021, total digital health deal value hit a high of $16.4 billion, and dropped to $8 billion in 2022. This year is trending even lower.

So what’s getting funded? The two most popular categories are behavioral health and care coordination. The biggest deal of the quarter was $115 million for Author Health, led by General Atlantic and Flare Capital Partners. The Boston-based startup provides serious mental illness and substance use disorder treatment to seniors in Medicare Advantage.

Andreessen Horowitz And Others Poured $200 Million Into Startup Health IQ. Now It’s Bankrupt

The company, which plans to liquidate, has $1.3 million in assets and nearly $257 million in liabilities, according to court filings. That will likely leave its lenders, investors and vendors with almost nothing.

Read more here.

Pipeline & Deal Updates

mRNA Therapeutics: Moderna announced that it is collaborating with German-based therapeutics company Immatics to develop mRNA-enabled cancer therapies. As part of the deal, Immatics will get a $120 million payment upfront with commercial milestones worth up to $1.7 billion, not including any royalties.

Autism Diagnostics: The Marcus Autism Center in Atlanta has launched its biomarker-based device that has been authorized by the FDA to aid in the diagnosis of autism in children between 16 and 30 months of age.

Healthcare Pricing: Sempre Health, which has developed a dynamic out-of-pocket pricing system for patients, announced it has raised $20 million in new investment.

Drug Design: Palo Alto-based Inceptive, which aims to develop what it calls “biological software” to develop designed drugs, announced it has raised a $100 million series A.

Neural Data: Sonera, which is developing non-invasive sensors to track neural activity, announced it raised an $11 million seed funding round led by Amplify Partners.

Aging Care: Bold, which is developing personalized clinical exercise programs for older adults, announced it has raised a $17 million series A round led by Rethink Impact.

Value-Based Care: Walgreens announced a strategic partnership with healthtech startup Pearl Health to provide software and services to primary care doctors to move into value-based care.

Cancer Diagnosis: AI cancer detection startup Paige, which has developed a foundation model trained on over one billion images from half a million pathology slides, announced a partnership with Microsoft in a bid to develop an even bigger model with “billions of parameters.”

CDC Gives Final Approval For New Covid Boosters For Most Americans

The Centers for Disease Control and Prevention recommended on Tuesday that Americans aged six months or older receive the new version of the Covid-19 vaccines that are specially designed to target the newest strains of the virus.

Read more here.

Other Healthcare News

Grocery giant Kroger has agreed to pay more than $1 billion to settle opioid-related lawsuits but did not admit wrongdoing.

Danco Laboratories, which manufactures the abortion pill mifepristone, has asked the Supreme Court to rule on whether the medication should be restricted.

Researchers at Massachusetts General Hospital believe they’ve discovered the hormonal link that explains why exercise may help reduce Alzheimer’s risk. Another study found people with sedentary lifestyles are more likely to develop dementia.

Former White House chief medical advisor Dr. Anthony Fauci says he doesn’t expect a return to a federal mask mandate despite a rise in coronavirus cases.

California’s state legislature has sent a bill to Governor Gavin Newsom, a Democrat, that would ban commonly used chemical ingredients found in popular snacks and drinks including Brach’s Candy Corn.

As the U.S. heads into the start of flu season, data from South America shows this year’s updated flu vaccine reduced the risk of hospitalization by 52%.

Across Forbes

Criminals Are Allegedly Using Apple AirTags To Track Illegal Weapons

As Google Turns 25, It Faces The Biggest Tech Antitrust Trial Of A Generation

Inside Apple’s Impossible War On Child Exploitation

What Else We are Reading

Amid another rise in cases, Covid’s new normal has set in (STAT)

Decongestant in Cold Medicines Found Ineffective (The Wall Street Journal)

Eldercare Startup Papa Loses Contracts With Major Health Insurers (Bloomberg)

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