Big Health, one of the top providers of mental health treatment apps, revealed on Thursday that it has acquired Limbix, the maker of a prescription app for adolescent depression.
The acquisition occurred at a time when many digital health startups are having difficulty raising capital; the terms of the deal, however, were not made public. In particular, makers of prescription digital therapies have been in a state of shock. At the height of the fundraising boom for digital health in late 2021, Limbix raised $15 million for the last time.
Arun Gupta, CEO of Big Health, stated that his organization has frequently been informed by employer and health plan clients that they require a solution for teenage mental health, an area where there is a growing need and care is difficult to come by. SparkRx, a Limbix medication for depression, recently completed a major clinical trial. A product for treating teenage anxiety is also currently in the early stages of development.
Big Health, which received $75 million in the beginning of 2022, has some momentum that can help Limbix’s products: The business claims that more than 300,000 people have used its cognitive behavioral therapy applications Daylight and Sleepio, which treat anxiety and sleeplessness respectively, and has distribution partnerships with Evernorth and CVS Health.
According to Gupta, the business would start selling SparkRx to its clients right away.
In accordance with a Food and Drug Administration enforcement policy that was in place during the pandemic and permitted firms to release applications treating specific psychiatric problems without obtaining marketing authorisation, SparkRx was initially intended to be a prescription product. It was made available during clinical trials under this policy.
Limbix had intended to submit the app for clearance before the policy was lifted this autumn, but Gupta said that plan may alter now that its trial has demonstrated a statistically significant reduction in depressive symptoms.
We still believe that evidence-based digital treatments that are capable of serving as effective stand-alone treatment options for patients are what actually matter in this situation.
In other words, perhaps Limbix doesn’t need the FDA label so much.
Despite having a strong body of clinical data, Big Health has decided not to seek regulatory approval for its apps because its founders worry that this may hinder their wider acceptance.
Big Health has so far done well by marketing its apps as wellness products that don’t require a prescription, which has attracted insurers and other payers who have been reluctant to support FDA-cleared prescription apps.
For the acquired Limbix apps, a similar approach might be successful, but according to Gupta, the future is still uncertain.
Big Health will soon be required to make some difficult regulatory decisions regarding its own goods.
Similar to Limbix, it made bolder claims regarding the effectiveness of its medications as therapies by exploiting the FDA’s pandemic enforcement policy.
The business hasn’t said yet if it would request authorization for its items before a deadline in November to adhere to pre-pandemic regulations.
If we believe that the regulatory process would be too onerous or restrictive for patients and consumers to actually access the goods, we have the option of moving back to a more wellness-oriented positioning, added Gupta.
Big Health still maintains the majority of the capital from its prior fundraising on its balance sheet, according to Gupta, who also stated that the business will examine potential opportunities to grow into complementary therapeutic fields as they present themselves.
I’ll tell you this much: We don’t intend to stop. He said, “I expect this won’t be the last thing that we do.”