It is expected that the sale will be completed soon. Enclose phrases in quotes. Tokyo, Japan and Redwood City, Calif. – November 14, 2017 – Otsuka Pharmaceutical Co., Ltd. (Otsuka) and Proteus Digital Health (Proteus) today announce that the United States Food and Drug Administration (FDA) has granted the first approval of a digital medicine system, ABILIFY MYCITE ® (aripiprazole tablets with sensor), a drug-device combination product comprised of Otsuka’s oral aripiprazole tablets … It may be acquired in a $15M 'stalking horse' bid. A collaborative team comprised of Otsuka and Proteus employees will be dedicated to commercial development and market coordination for the ABILIFY MYCITE System, software integration and standardization, manufacturing and supply chain integration, and coordination. As part of the deal, Otsuka invested $88 million in the company. Spring Ridge Ventures owns almost all of its Series A preferred stock. Unlock this article by subscribing to STAT+ and enjoy your first 30 days free! In 2018, Otsuka and Proteus Digital Health signed a five-year digital pill partnership, aiming to develop a new generation of ingestible sensors to track patients' adherence to treatment. In their objection, the group of investors argued that the sale to Otsuka "amounts to nothing more than a giveaway" of Proteus' valuable assets to an "insider" and the $15 million sale price is calculated to bring in "just enough to pay the creditors in order to buy their silence" at the expense of equity, the investors said, according to case documents. Potential buyers were concerned that they would be "stuck in a business that was losing money and no way for them to exit on the other side," he said. Here’s what stands in the way of their broader adoption, 9 leading names in digital health weigh in on the biggest barriers facing the industry, The most comprehensive industry coverage from a powerhouse team of reporters, Daily newsletters to brief you on the most important industry news of the day, Weekly opportunities to engage with our reporters and leading industry experts in live video conversations, Premium access to subscriber-only networking events around the country, The most trusted and well-connected newsroom in the health care industry. With half a billion dollars invested, the company had failed to create a sustainable business model, he said. Otsuka handed Proteus $88 million in a mix of equity and other payments to help fund a portfolio of new digital medicines focused on mental health, including continuing commercial work for the sensor-laden Abilify MyCite pill approved by the FDA in 2016. © 2020 CNBC LLC. The sale, approved on Wednesday by a federal bankruptcy court judge in Delaware after a three-day hearing, overcame the fierce objections of a group of Proteus investors that included the pharma giant Novartis. Proteus Digital Health filed for Chapter 11 bankruptcy protection June 15 and will now be acquired by Otsuka Pharmaceutial. Yet, with the advent of digital technology, health outcomes have not taken the same leap forward. Subscribe to FierceHealthcare to get industry news and updates delivered to your inbox. Proteus Digital Health and Otsuka Pharmaceutical have expanded their partnership on digital therapeutics. “Our digital medicine businesses have evolved to a point where we can maximize success by pursuing future opportunities independently and we are excited for both organizations moving forward. 3 Speen Street, Suite 300, Framingham, MA 01701. WT | Wearable Technologies is the pioneer and worldwide leading innovation and market development platform for technologies worn close to the body, on the body or even in the body. The group of investors said the sales process was "flawed" and would leave investors with $500 million in equity "holding the bag," according to case documents. Smart pill maker Proteus Digital Health on Monday filed for Chapter 11 bankruptcy, the latest sign of trouble at the Silicon Valley company that was once seen as a showcase for how technology can revolutionize how patients take their medicine. An attorney representing the group of secured equity holders who objected to the sale did not respond to a request for comment. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond. Our award-winning team covers news on Wall Street, policy developments in Washington, early science breakthroughs and clinical trial results, and health care disruption in Silicon Valley and beyond. The move will allow Proteus to reorganize its business structure and pay down its debt without closing down. A Division of NBCUniversal. Use a + to require a term in results and - to By. But Proteus made headlines in November 2017 when the FDA approved Abilify MyCite, which allowed the digital ingestion tracking system to be combined with a schizophrenia therapeutic. Once valued at $1.5 billion, Proteus raised a total of $420 million from investors. Meanwhile, etectRx, a competing ingestible adherence tracker system, announced its FDA clearance last month within a day of Proteus’ struggles coming to light. 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This includes the joint development of an expanded portfolio of digital medicines consisting of other therapies such as … Proteus was one of the first digital health "unicorn" companies. The "smart pill" maker's sensor was one of the first of its kind to receive clearance from the Food and Drug Administration (FDA). Exclusive analysis of biotech, pharma, and the life sciences. Proteus has prematurely ended its high profile $88 million deal with Otsuka, reports MobiHealthNews. The company has raised more than $500 million in venture capital from a mix of technology investors, family offices and pharmaceutical giants like Novartis. A collaborative team comprised of Otsuka and Proteus employees will be dedicated to commercial development and market coordination for the ABILIFY MYCITE System, software integration and standardization, manufacturing and supply chain integration, and coordination. Proteus Digital Health has filed for Chapter 11 bankruptcy protection. RELATED: Novartis, other investors try to delay sale of Proteus Digital Health. As employers look to safely bring people back into buildings, it has opened up a massive market opportunity for healthcare and tech players. RELATED: Proteus Digital Health was once valued at $1.5B. Got a confidential news tip? A group of secured equity holders including drug giant Novartis and two Hong Kong investment firms objected to Proteus' potential sale out of U.S. bankruptcy court. “It looks now like Proteus may have picked [a] therapeutic area with a degree of difficulty that’s an eight or nine out of 10, right? exclude terms. A spokesperson said that "filing for bankruptcy protection allows Proteus to continue its sales process in a more concerted and efficient manner while continuing to run the business as usual.". According to the legal filing, the company has $100 to $500 million in assets and $50 to $100 million in liabilities. It has an estimated 200 to 999 creditors, and its top creditors include PREI's Westport Office Park ($1,035,305), Romaco North America ($510,848), Otsuka America Pharmaceutical ($397,721), Workday ($288,000) and Xceliance ($215,616). Judge approves sale of bankrupt Proteus Digital Health to Otsuka for $15M, Proteus Digital Health was once valued at $1.5B. In the ruling, the judge said that Otsuka is not an "insider," and that Proteus had afforded a "full, fair and reasonable opportunity" for other companies to make a higher or better offer for the assets. Exclusive interviews with industry leaders, profiles, and premium tools, like our CRISPR Trackr. The latest news in digital health delivered daily to your inbox. Data is a real-time snapshot *Data is delayed at least 15 minutes. Proteus, founded in 2001, develops ingestible sensors and a wearable sensor patch to track medication-taking behavior. Cathy Russey-16. Proteus’ CEO, Andrew Thompson, told STAT News that the company and Otsuka Pharmaceutical have ended a […] To access this post, you must purchase Free … Proteus Digital Health has a $15 million "stalking horse" offer from the American unit of Otsuka Pharmaceutical, which is a fraction of the company's onetime $1.5 billion valuation.