K J Somaiya Medical College

Digital health startups raised $2.2 billion across 125 deals in the third quarter this year, marking the lowest-funded quarter since Q4 2019. The report by Rock Health found digital health funding has reached $12.6 billion across 458 deals so far this year, far below 2021's booming investment landscape. Funding also fell 48% between Q2 and Q3 this year, while the number of deals only dipped 14%. Though it seems like dire news for the sector, Rock Health researcher Mihir Somaiya wrote that the number of small and earlier-stage deals stayed fairly steady. Plus, there was plenty of big digital health news this quarter. "Given the year’s choppy venture waters and public market correction, investors are holding back from the market, waiting to strike once things stabilize. Q3’s low funding numbers – the lowest quarterly funding total in the past 11 quarters – reflect that sentiment," he wrote. Rock Health's Adriana Krasniansky, Megan Zweig and Bill Evans also contributed to the report. "Yet, even though the market isn’t the same as it was, this quarter has featured some standout digital health activity, including major acquisitions by Amazon and CVS, and Akili’s SPAC close, this year’s first digital health public exit." So why were there so few later-stage deals this quarter? The report noted only six raises at Series C or higher, compared with 19 in Q2 and 32 in Q1. There were also only two mega rounds, or rounds worth $100 million or more. The authors suggest three potential explanations behind the slowing late-stage funding. Deals may have been pushed ahead to 2021 to take advantage of the booming funding environment, others may be happening quietly through round extensions or venture debt, and there are some rounds that just aren't happening. The quarter also saw some shift in which value propositions are scooping up venture dollars. Companies touting nonclinical workflow tools have raised $1.8 billion so far this year, taking the top funded value proposition compared with seventh place in 2021. That could reflect a continued focus on improving clinician burnout and managing staff shortages. Digital mental health companies continue to lead in the top-funded therapeutic area, bringing in $1.7 billion so far in 2022. The report also noted a shift to more complex mental illness management. Somaiya wrote that, while Q1 and Q2 may have seemed like an adjustment coming off the blockbuster funding of 2021, this quarter has demonstrated a move away from the pandemic-fueled digital health market. "Rational prices promote long-term market health and, if anything, diminish near-term worries," he said. "Nonetheless, we’ll be watching Q4 closely to see which of these trends take hold to shape the market going into 2023. Small ripples can lead to big waves – and we’re curious to see where these directional turns lead."

September 13, 2017 By Alex Keown, BioSpace.com Breaking News Staff NEW HAVEN, Conn. – Could a series of acquisitions help Alexion regain its footing? That’s what BMO Capital Markets Corp. analyst M. Ian Somaiya believes. In a note published Tuesday, Somaiya said Alexion could benefit by setting its sight on Sage Therapeutics and Ra Pharmaceuticals. Somaiya’s thoughts, first reported by The Street, came one day After Alexion announced it was looking for a fresh start. On Tuesday, the company said it was laying off 20 percent of its staff, shuttering some sites and planning to relocate its headquarters from Connecticut to Boston. Alexion said the restructuring and changes will save the company approximately $500 million in GAAP and non-GAAP pre-tax savings yearly by 2019. Those savings are expected to be reinvested in its R&D efforts and other investment opportunities. Ludwig Hantson, Alexion’s chief executive officer, said the streamlining of company resources will create a leaner organization with greater financial flexibility. In his note, Somaiya said Alexion will need to prioritize on rebuilding its pipeline, which could include acquisitions focused on an expansion into orphan and ultra-rare diseases. Somaiya expects that Alexion will consider Ra Pharmaceuticals due to its diversified complement pipeline and Sage due to its diverse pipeline, The Street noted. The same day Somaiya suggested Sage, that company saw a stunning failure when its epilepsy drug Brexanolone failed to help patients with a severe form of the disease. Phase III data from that trial showed Brexanolone failed to statistically differentiate itself from placebo. While Brexanolone does not appear to benefit epilepsy patients diagnosed with the severe form of super-refractory status epilepticus, the drug is showing promise in the treatment of postpartum depression. Earlier this year, it snagged Breakthrough Therapy Designation by the U.S. Food and Drug Administration. Ra Pharmaceuticals also received a promising designation from the FDA earlier this year. In July, the FDA granted Orphan Drug Designation to RA101495, the company’s lead clinical candidate, for the treatment of paroxysmal nocturnal hemoglobinuria (PNH). RA101495 is currently in Phase II development as a self-administered subcutaneous injection for PNH, a rare and life-threatening blood disorder where red blood cells are attacked and destroyed by the complement system. In addition to PNH, RA101495 is also being developed for treatment of refractory generalized myasthenia gravis (rMG), and lupus nephritis (LN). The drug is also undergoing preclinical testing for treatment of Escherichia coli sepsis. Alexion is not only looking at rebuilding its pipeline, but is also dealing with the shadow of past controversies. The company continues to grapple with allegations of improper sales practices for Soliris – allegations that lead to the resignation of the former CEO of the former CEO David Hallal, as well as Vikas Sinha, the company’s chief financial officer. In January of this year, Alexion admitted that unnamed members of its senior management team used “inappropriate business tactics” to market Soliris. In January, the company said some revenues pulled in 2015 and 2016 were “realized by employee actions that involved inappropriate business conduct, including violations of company policies and procedures.”