HEALTH TECH

Daddy

In a move that will expand its footprint in the fertility space, online pharmacy Ro has acquired male fertility startup Dadi for around $100M (link). This acquisition rides Ro’s 2021 acquisition of another fertility startup Modern Fertility for $225M (link). Is the message clear yet? Ro wants to be the dominant player in the fertility space.

The Deets
Ro is a direct-to-consumer pharmacy selling treatments for smoking cessation, erectile dysfunction and obesity (link). The company acquired women’s fertility startup Modern Fertility last year, giving Ro access to an array of fertility products (link). Now, Ro has acquired Dadi, a sperm-testing startup, allowing men to safely and securely collect sperm samples using Dadi’s sperm storage and testing technology for $199.

Other startups are also tackling the fertility space and making moves:

• Kindbody, which offers virtual, at-home and in-person services for fertility, acquired Vios Fertility Institute with 26 clinics across the U.S. (link).
• Proov, an at-home fertility test company for men and women, raised around $10M in Series A in December (link).
• Male-focused fertility startup Legacy raised $10M in Series A last year (link).

#Trending 
The consolidation trend continues (link). A couple of weeks ago, I discussed SimpleHealth’s acquisition of competitor contraceptive care company Emme (link). Now, Ro is adding to its fertility products with Dadi, following its Modern Fertility acquisition. With Modern Fertility alone, Ro addressed the 11% of women who experience fertility problems. Dadi allows Ro to hit the 9% of men with fertility problems, a huge total addressable market.

I noted in a recent newsletter that the consolidation movement may help build a few companies doing great things instead of many companies doing good things. However, I feel strongly that Ro is one of those companies consolidating certain sectors like fertility to be a company doing great things.

BIOTECH

Cut It Out

Intellia Therapeutics’ one-time dose CRISPR gene therapy can substantially reduce levels of a protein known to cause transthyretin amyloidosis, a debilitating and fatal disease (link). The therapy’s new Phase I clinical trial results are exciting, paving the way for a new era of medicine and biotechnology.

The Deets
Transthyretin amyloidosis occurs when a liver protein, transthyretin, becomes unstable and subsequently builds up in your nerves, leading to loss of sensation in the extremities and difficulty controlling bodily functions.

CRISPR technology, the future of gene therapy, allows medicines to target specific disease-causing genes in your cells and cut them out. Intellia’s CRISPR therapy targets the gene in liver cells that produce transthyretin and removes it. Simply speaking: no gene, no protein, no amyloidosis.

Intellia’s interim Phase I study had 15 participants with transthyretin amyloidosis and associated nervous system complications. The results showed a dose-dependent reduction in transthyretin, meaning the higher the dose, the lower the protein concentration.

Not Alone
Other biotech companies are targeting transthyretin amyloidosis, but not by CRISPR. For example, Alnylam Pharmaceuticals and Ionis Pharmaceuticals make drugs that silence the transthyretin gene while Pfizer’s pill stabilizes the protein.

My Thoughts 
I remember learning about CRISPR in my Biology 101 class six years ago. To see this technology in action gets me so excited about the future of medicine and to one day (whenever that day is) treat my patients with CRISPR therapy.

I fear, though, about the economics of Intellia’s therapy. While Alnylam, Ionis and Pfizer can expect to see recurring revenue from patients taking their medications daily or monthly, Intellia won’t since its therapy is one-and-done. And, amyloidosis is a rare disease—not many people will be using the therapy.

I suppose, the company could make a value-based reimbursement model where they take on more risk to be paid more for the value of their drug, based on the protein reduction seen in patients, but I haven’t really seen this model in action yet (link).

Lastly, Intellia may run into some patent trouble over the CRISPR technology, after a federal patent board determined the tech belongs to the Broad Institute (link).

BUSINESS

GSK Splits in Two

Pharmaceutical company GSK will spin off its consumer health business with Pfizer over the summer, marking the largest demerger in Europe in the past 20 years (link). Haleon, the name of GSK’s new consumer business, follows a new-ish trend of demergers among incumbent pharmaceutical and device companies.

The Deets
The demerger will allow GSK to have a stronger, separate focus on its consumer health products, which generated around $13B last year. GSK’s consumer line includes Sensodyne toothpaste, Panadol pain medication and Voltaren arthritis relief medication—products that you’ve likely used before. The company expects Haleon will grow 4% to 6% organically in the medium term.

Haleon is a joint venture between GSK and Pfizer, who will have around 30% equity in the joint venture and bring along its infamous Advil and Chapstick products. Haleon is quite an attractive business—Unilever tried bidding $68B for the business last year, but GSK rejected it.

#Trending
J&J announced in November that it’ll be separating its consumer health products from its pharmaceutical and device operations, much like what GSK is doing and much for the same reason (link):

The split allows J&J to have a strong — but separate — focus on its core products and operations, giving the company “even more agility” and “a better opportunity for capital allocation.”

Similarly, General Electric announced it would also split up into three companies last year: aviation, healthcare and energy.

I asked in a past newsletter: “will we see more companies following suit?” The answer now seems to be, “yes.”

OUTSIDE THE HUDDLE

• The Sackler family has finally agreed to a $6 billion settlement for the role in the opioid crisis.
• Florida lawmakers voted to ban most abortions after 15 weeks of pregnancy. The bill is structured much like Mississippi’s abortion ban, which the Supreme Court will finally rule on this year. Click here to catch up (article 3).
• Ukraine’s healthcare system is in crisis. Not only is there a new influx of casualties requiring care, but treating those who were already ill before the war is becoming increasingly difficult.
• Nayya raised another $55 million on their quest to improve the way employees choose their benefits, especially those related to healthcare and wellness.
• Cigna is investing a whopping $450 million into its venture fund, aptly named Cigna Ventures. Sure enough, Omada was one of their previous investments, so maybe Cigna’s onto something.
• KHN published a thorough deep dive on the omission of pregnant people from Covid-19 vaccine trials. This is an ongoing issue not at all unique to Covid-19 vaccines. Over 80% of all treatments prescribed to pregnant patients haven’t been studied in pregnant patients.

HUDDLE HITS

• 🧵Thread of the Week: Blake Madden recaps Biden’s State of the Union and the key health initiatives the admin plans to tackle. I doubt the admin can achieve each initiative, but it’s worth the shot.
• 👨‍⚕️Med School Adventures: I’m on my colorectal surgery rotation and scrubbed into such a fascinating procedure Friday night called Hyperthermic Intraperitoneal Chemotherapy (HIPEC). Check it out here!
• 📺 What I’m Watching: Love is Blind Season 2. I love it. You love it. The world loves it.
• 🎵 Jam of the Week: Only Child by Tierra Whack.
• 😻 Chunky Cat of the Week: Filet Mignon AKA Mignon AKA Chunky Monkey. Send me pics of your pets and I’ll include them in the newsletter!