As mental health tech heats up, startups in the space are making more exits

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A clash between scientific criticism and health tech hype

The maker of Daysy, a $300 digital fertility tracking thermometer, is forging ahead with a legal campaign against a researcher who publicly criticized its efficacy claims — a move that could have a chilling effect on scientific criticism of much-hyped health tech, researchers warn.

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At the heart of the case is a study of pregnancy rates among users of Daysy. The paper, published in the journal Reproductive Health, was ultimately retracted out of concern about the reliability of its findings, an issue researcher Chelsea Polis had raised. Valley Electronics sued Polis after she criticized the company’s research and called the company “unethical.” The defamation case was thrown out, but Valley Electronics has mounted an appeal, set to be heard this month.

“These lawsuits make (scientific criticism) less likely to happen,” said Elizabeth Hall-Lipsy, a law and science policy professor at the University of Arizona. “People say, ‘Well, I saw what happened to that other person, so maybe I don’t publish my blog. Maybe I don’t make a comment on that product.’” Our colleague Kate Sheridan and Casey have the story.

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Biden plans boost for virtual mental health care 

President Joe Biden pledged to prioritize mental health care during his State of Union address Tuesday — and that includes expanding access to virtual appointments, according to the White House. 

The White House plans to work with Congress to ensure that more health plans cover virtual behavioral health, and that it can be delivered across state lines. It also plans to nudge the Federal Employees Health Benefits Program to pay for telehealth and to reduce or eliminate co-pays for people seeking virtual mental health care.

Biden also nodded to ongoing Congressional discussions about the best way to protect consumers’ data. “It’s time to strengthen privacy protections, ban targeted advertising to children, demand tech companies stop collecting personal data on our children,” he said.

Mental health funding and exits soar

Entrepreneurs and investors are capitalizing on increased attention to the nation’s mental health needs, funneling $5.5 billion toward mental health tech startups globally in 2021, according to data from CB Insights. 

That’s up 139% from the previous year. The majority of those deals — almost 70% — were early-stage. And the U.S. appears to be leading the pack, accounting for $4.5 billion of those global funding dollars.

We’re also seeing an uptick in exits globally: There were 43 in mental health in 2021, including mergers and acquisitions, SPACs and IPOs. As shown in the above chart, that’s up 87% from the previous year.

AI shows promise in early detection of eyelid tumors 

Catching eyelid tumors early could help patients avoid complications or stop cancers before they spread, but it’s hard to distinguish between benign and malignant growths, researchers say. That’s why they built an artificially intelligent system that drew on more than 1,000 images from several hundred patients to try to tell the two apart — and its performance was comparable to that of a senior ophthalmologist, according to the study published in Nature’s npj digital medicine. The findings suggest that the system could be used to screen patients and boost early detection.

The latest health tech deals

  • Rupa Health, which is building a lab ordering system for health care providers, raised $20 million in a Series A round led by Bessemer Ventures. The company says it aims to promote a more holistic root cause medicine.
  • Employee benefits selection platform Nayya Health raised $55 million in a Series C round led by ICONIQ Growth to further personalize its recommendations.
  • Digital therapeutics company Dario Health joined Sanofi in a $30 million agreement to promote Dario’s platform for managing various conditions including diabetes, high blood pressure and musculoskeletal conditions. The two companies will also work on new products using Dario’s technology and gather more evidence about how they work.
  • Data analytics platform MDClone raised $63 million in a Series C funding round led by Warburg Pincus and Viola Growth.
  • Direct-to-consumer health company Ro expanded further into fertility care with its acquisition of sperm testing and analysis company Dadi.
  • Cigna’s adding $450 million to its digital health investment fund, Cigna Ventures. 
  • Behavioral health care company Daybreak raised $10 million in a Series A funding round led by Lightspeed Ventures.

New moves and new designations

  • Cerner CEO David Feinberg was elected to Humana’s board of directors.
  • Insurance-focused tech company Clover Health named Conrad Wai its chief technology officer.
  • The FDA granted breakthrough device designation to Dexcom for use of its continuous glucose monitor by health providers in hospital settings. For more, read Katie’s past coverage of how the pandemic ushered in a new role for CGMs in hospitals.

What we’re reading

Source: STAT