Fundraising

Stanford spinout Atropos raises $33 million

STAT's Mohana Ravindranath writes to tell us that physician-founded real-world data evidence and AI company Atropos Health has raised $33 million in a round led by Valtruis. A handful of new strategic investors joined the round, including McKesson Ventures and Merck GHI Fund.

Atropos sells institution-level subscriptions to its platform that allows clinicians to pose questions the technology might find answers to in Atropos’ treasure trove of real-world data and medical literature, the company told STAT. Mayo Clinic, Stanford, and Janssen Pharmaceuticals are using Atropos.

Co-founder Brigham Hyde said that the round will help the company expand data partnerships it has with companies like Arcadia, among other goals.

M&A

Click gobbles up Better to chase GLP-1 opportunity

Back in March, when Better Therapeutics announced it was shutting down and seeking strategic alternatives, I was struck that the company had run out of gas just as its golden opportunity was materializing. The company, which last year earned Food and Drug Administration clearance for its software-based treatment for type 2 diabetes, had started to produce evidence that its app could improve the treatment effects of GLP-1 medications.

Sure enough, this week Click Therapeutics announced that it would  acquire Better’s assets to augment its development of a digital treatment for obesity that’s specifically designed to work alongside drugs, including GLP-1s. Click sees a large opportunity presented by the FDA’s new proposed framework that allows claims about the additive benefits of software products to be included on a drug’s label. The treatment is very early in its development, but the deal hints at the opportunity for digital therapeutics companies to work alongside drug makers rather than going it alone.

“It’s not software — it’s a drug plus digital, [and] it’s coming out of the FDA,” Click’s chief commercial officer Richard DeNunzio told me. “To me then it becomes very clean and clear, and a lot of these hurdles that we talk about commercially, are seeing commercially, essentially go away.”

Read more about Click’s plan for obesity here

Diagnostics

Cue Health lays off entire staff, shuts down

Cue Health, which like Better Therapeutics (above), went public amid the health tech craze of 2021, has decided to throw in the towel, STAT’s Brittany Trang reports. The high-tech at-home diagnostics company which took advantage of federal grants for covid-19 testing to expand, has been imploding in slow motion for some time, a process that went into overdrive over the last few weeks. 

On May 1, the company announced it would lay off a significant portion of staff. Then two weeks later, just as the company was about to report its first-quarter earnings, the FDA issued a warning to consumers to throw out Cue covid-19 tests, citing significant shortcomings identified in an inspection of Cue’s facilities. A few days later, the company announced that several members of the board, including founder and former CEO Ayub Khattak, would be stepping down and that the company would not report earnings at all. Then this week, Cue amended its notice of layoffs filed with California state regulators to say that all remaining employees would be let go.

On Wednesday, Cue had a market valuation of $16.5 million — a fraction of its $2.3 billion valuation at the time of going public in 2021.

Read more about Cue's demise here