Proteus Extends Its Series G Funding Round, Closing at $172 Million

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Proteus Digital Health, the Redwood, Calif-based digital medicine startup announces the conclusion of its massive $172 million Series G funding round. The company previously reported that it had raised $120 million of the round in June of this year, but indicated at the time that the round may be extended to make room for additional investors. Investors from the US, Europe, and Asia contributed to the round, though names were not disclosed. Proteus is likely the single most successful health IT startup ever in terms of raising venture capital. Since its 2001 launch, the company has raised just shy of $300 million from a wide range of investors.

Proteus has developed a tiny ingestible sensor that can be embedded in a pill and programmed to transmit a signal to a smartphone once swallowed. A tethered smartphone app then records the date, time, and type of medication that was taken, providing a digital track record of medication adherence. The app can also trigger reminders when medications are not taken on time, and alert family members of long overdue doses. Because medication compliance is a leading contributor to hospital readmissions and overall complications with chronic disease management, Proteus’s technology has the potential to genuinely disrupt the pharmaceutical industry. Technologies that transformative do not come along often, and when they do, its clear that every investor in Silicon Valley wants in.

Beyond VC funding, Proteus has also won over its eventual customers, pharmaceutical and medical device manufacturers. Novartis, the pharmaceutical company that recently signed a licensing agreement with Google to commercialize its glucose-monitoring contact lenses, invested $24 million in the company in 2010 in exchange for equity and licensing rights to incorporate Proteus’s sensors in several of its medicines. The investment followed a small clinical trial conducted in partnership between Proteus and Novartis in which medication adherence was measured in patients taking Diovan, a blood pressure drug. Adherence rates jumped from 30 percent to 80 percent when Proteus’s sensor technology was introduced.

Standing in its way now is a lack of federal approval to begin embedding the sensors directly into active pills. Currently, the company is only authorized to package its sensors in a placebo pill, which is then taken in conjunction with the active medicine. However, the vision Proteus and its investors have in mind is a sensor technology that could be embedded directly into all medicines. A technology that could be marketed directly to pharmaceutical companies and monetized for huge profits.

When asked for a comment, Proteus told HIStalk Connect “Proteus has secured a clear pathway and process for regulatory approval of fully integrated digital medicines and is committed to partnering with the FDA on the assessment of these digital medicines over the next year.”

With pharmaceutical companies so interested in its technology that they’ve stepped up as investors themselves and a reportedly clear path to pre-market approval culminating within the next year, its no surprise that Proteus is able to rake in massive funding rounds.


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