I’ve been thinking a lot lately about the IPO market for digital health companies — especially in light of recent reporting on two high-profile West Coast-adjacent startups. Silicon Valley-based Livongo Health, which charges insurers and health plans to monitor patients with chronic disease, is weighing whether to go public this year. So, too, is Salt Lake City-based Health Catalyst, which helps hospitals analyze their own data.
To put this in context: Digital health has been weathering a serious IPO drought. How serious? The last time a digital health company went public, candidate Hillary Clinton had a 12-point lead over Donald Trump in the polls.
So why have digital health companies been so shy about braving the public markets? I see two key reasons: One is that startups see plenty of upside in staying private longer. Venture money is flowing. And remaining private lets companies keep their secrets close in a way that public companies can’t.
The second reason is that digital health companies see plenty of appetite for acquisitions. The most notable ones last year were online pharmacy PillPack (bought by Amazon) and Flatiron Health (bought by Roche), but all told, 110 companies in the sector got acquired last year, according todigital health venture firm Rock Health.
If Livongo and Health Catalyst do go public soon, they could be bellwethers in a new wave of digital health startups to ring the bell. And that could have big implications, both for the sector and for investors.
After all, digital health is a different beast than biotech. Few digital health companies conduct and publish the kind of gold-standard research that is essential when you’re developing drugs. And while drug and diagnostic makers generally know exactly who their customers are, lots of digital health companies are still trying to figure out the audience for their services. Plus, plenty of health plans and patients remain skeptical of digital health interventions that, fairly or not, feel less urgent than a lifesaving drug.
In any case, I’ll be closely watching digital health’s reentry into the public markets.
Now, onto the latest headlines
Apple had a big day this past weekend, as researchers unveiled results from a massive study assessing how well the Apple Watch detects important heart-rhythm changes. But as my STAT colleague Matt Herper explains, the results were complicated, and cardiologists remain cautious. Next up for the Apple Watch? Another big study, which will be conducted with Johnson & Johnson. In an unusual design, the new study will track patients by plugging into insurance claims databases.
Remember DeepMind, the U.K.-based AI company that Googleacquired in 2014? I learned a ton about the now-annexed company in a great longread from 1843, the Economist’s magazine. Most interesting to me: The tensions involved in rolling DeepMind’s health unit into Alphabet’s empire.
What difference does a decade make? That was the question researchers set out to answer by analyzing the makeup of the health sciences faculty at the University of California, San Diego, between 2005 and 2015. That period saw an increase in the percentage of women and underrepresented minorities on the faculty. But it also saw the persistence of a pay gap in which male faculty members earned more than their female counterparts.
Stanford just formally launched a new institute aimed at promoting “human-centered artificial intelligence” in a variety of disciplines — including health care. By my read, the goal is to make sure our new AI overlords have some oversight. Among the projects the new institute has supported so far: developing a system to improve the care delivered in hospitals’ intensive care units.
California’s fertility sector just got the Vogue treatment. A new feature in the fashion magazine chronicles the reproductive technology, the costs — and, yes, the glamour, too. The story also includes this line: “Patients come for the IVF, and they stay for the Malibu sunsets.”
For the latest episode of STAT’s biotech podcast, I sat down with Ethan Perlstein, a CEO who at the end of last month had to shut down his South San Francisco biotech startup. We talked about the life and death of Perlara — and what he learned along the way. You can always find new episodes of "The Readout LOUD" here or wherever you get your podcasts.
Chart of the week
Y Combinator’s latest batch of startups made their debut in San Francisco this week at the accelerator’s biannual pitching ritual known as Demo Day. You can browse through the list of newcomers here. Of the 200 startups in the newest class, 29 of them are working on biology, a Y Combinator spokesperson told me. That’s a bit down from last summer’s class, but it’s in keeping with a clear trend: Y Combinator is placing more emphasis on the life sciences.
A few news items of note on the anti-vaccine front
Twitter CEO Jack Dorsey sparked a minor uproar when he recorded a podcast with a fitness guru who’s been open about views about vaccines contrary to the scientific consensus.
Some strong reporting out of San Diego highlighted the outsized role that individual doctors can play in the anti-vaccine movement. The news organization Voice of San Diego reports that one physician was responsible for writing nearly one-third of all medical exemptions from the vaccination requirements for school-aged children in the local school district.
One San Jose real estate agent is making an unusual marketing pitch to try to convince conservative Californians to sell their homes and move out of state: less restrictive vaccination requirements outside of California, the San Jose Mercury News reports.
Coming up next week
The 1920s brought a prohibition on alcohol. Could the 2020s usher in a prohibition on tobacco?
The first big test case for the question is the Southern California city of Beverly Hills, perhaps best known as home to Hollywood stars. The city council there is weighing a ban on all tobacco product sales within city limits — something that’s been done in several Middle Eastern cities and countries but not yet in the U.S. This coming Monday, a Beverly Hills city commission will hold its first meeting for detailed policy discussion and public input before making a policy recommendation in May.
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