May 9, 2022

Newsletter: Brains, Bubbles, & BDD | May 9th, 2022

Brains, Bubbles, & BDD


You've probably been hearing a lot about bubbles.

 

The thing is— in the early stages of a bubble— people don’t know that they're in one. They just notice the prices going up and believe it’s justified.

 

Thus, bubbles are usually identified after they pop.

 

The dot-com bubble in the 90s was an equity bubble. The housing crisis of the late 2000s was a debt bubble. Economic bubbles are created when too many investors are chasing too few assets. Sound familiar to any of you life science geeks?

 

Our industry has been vastly inflated due to record-setting fundraising combined with the pursuit of Covid products, namely diagnostics, vaccines, and therapeutics.

 

This has all been on top of a white-hot stock market and favorable employment market. With my stockbroker calling my margins every day and the feds declaring that the rate hikes will occur at least 6 times this year— we’re headed for some significant inflation.

 

Some folks may disagree with the term "bubble". Bubble or not, we are in for a serious correction. If you’re not paying attention, companies that have not employed a discipline in their financial spending have already started laying off in record numbers. This is just the start.

 

Last week Fierce Biotech started a layoff tracker. What’s crazy is there are LOTS of companies not on this tracker!

 

Anyway, buckle up. If you haven’t been killing it at work, maybe now is the time to make yourself invaluable. And if you’re thinking about a transition, you might want to do some more diligence than just salary and benefits. It’s going to be a rough year.

 

Hang on!

 

***

 

The effect of an uptick in private equity mega-funds is making the pools of capital shallower for general partners. This will come back to bite private equity and change up the landscape they’ve been enjoying for the last couple of years.

 

Analysts from Pitchbook anticipate the following could occur:

 

-Affect the speed and ease of fundraisings processes

-Create temporary ceilings on PE fundraising activities as LPs won’t have enough capital to commit

-Force GPs to look for capital via insurance and retail instead

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BDD— Churning out innovation or profit?

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The goal of the breakthrough device designation program is to help bring innovative, safe, and effective devices to market to improve patient care. The devices that qualify for the program are novel and provide an option for patients and providers where there may otherwise be none.

 

BDD allows for more face-to-face meetings with FDA officials, providing insight into the regulatory development of a product and expediting the review timeline.

 

Because these devices are tapping into an unmet need, the Feds are more lenient in their requirements of data— as long as the company continues to test the product’s safety and efficacy— somewhat of a good faith agreement.

 

However, since its inception in 2017, the FDA hasn’t been forthcoming on the details of why a particular device receives BDD over another. And the lack of transparency in its execution has many health policy experts wondering whether the program is really meeting its goal of providing access to innovative medical devices.

 

The problem is that without transparency and a clear breakdown of why a device receives BDD, patients and providers are in the dark about the details of risks and benefits and can be misled in their decision-making.

 

If we aren’t privy to the information, who really knows whether some products that get pushed out are really safe and effective or whether the motivation is financial. Our own interactions with the FDA sometime leave us scratching our heads at differing requirements and expectations.

 

To set out and do what it was created for, the Feds need to open the door on the BDD process— specifically disclosing information on how and why a device received the designation and perhaps why it didn’t.

 

Until then, who knows what deals are being made behind the scenes.

Cerebral’s Questionable Business Practices Come To Light

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A few newsletters ago, we covered Simone Biles being named CIO for Cerebral. A big move by adding a big name. But since the announcement, things have been a little rocky for the digital health company.

 

Cerebral’s been in some hot water over its marketing and social media campaigns— which critics claim are aimed at young adults. They aren’t the only company using TikTok and Instagram to advertise, but they are the most well-known company doing it. (TikTok & Instagram even pulled some Cerebral ads that were linking ADHD to obesity, as seen in the screenshots above.)

 

This scalding depiction of the company’s business practices shine a not so pretty light on the underbelly of what’s happening there and what’s potentially in store for online drug companies and pharmacies in the future. Yikes!

 

But the latest controversy has led to their preferred pharmacy, Truepill, stopping all shipments of Adderall and other ADHD medications.

 

The reason for the halt in shipping is due to concerns of over-prescribing by Cerebral. Truepill didn’t flat-out say that this was the reason for the stoppage, but it is interesting to note that Cerebral’s former VP is suing the company, claiming he got canned for questioning the unethical prescribing practices.

 

At ATA2022, Cerebral’s Chief Medical Officer Dr. David Mou admitted mistakes had been made but stressed that the company was learning from the missteps.

 

We’ll see how this plays out.

“Reversing” Parkinson’s With Brain Implant

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More than 10 million people worldwide are living with Parkinson’s Disease. The tremors, cognitive changes, Bradykinesia, and the many other symptoms associated with this disease are debilitating. However, a new study out of the UK is described as “reversing” the effects of PD.

 

With PD, the substantia nigra part of the brain drops in nerve cell count. This part of the brain generates dopamine, and in an attempt to offset the degeneration, the brain fires abnormal nerve impulses which cause the symptoms experienced by patients with the disease.

 

Southmead Hospital in Bristol used a tiny deep brain stimulation (DBS) device to control the abnormal firing of nerve impulses. This treatment could replace the traditional approach that involves surgically implanting a large impulse generator battery (IGB) into the abdomen or under the collarbone of a patient.

 

The DBS device is significantly smaller than an IGB and can be implanted in less time.

 

The researchers involved in this study will continue to monitor the effects and implant 25 more DBS devices as the trial continues into next year.

American Pediatrics Group Revisits Biased Guidance

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The American Academy of Pediatrics announced a new policy in which they will sift through all guidance to remove any “race-based” information on treatments or medicine.

 

The group is committed to change and will be going through their “entire catalog,” which includes educational material, textbooks, and articles to eliminate any inaccuracies.

 

Just last year, the academy did away with a guideline calculation based on the unsubstantiated claim that Black children faced less risk of urinary tract infections than their white peers. This summer, they will be looking at the guidance that connects the risk-level of jaundice with specific races.

 

Their goal in committing to the audit is to reduce race-based health disparities in America. This is certainly the right step. Nice to see some action along with the talks of change.

 

_______________

 

 

For those of you who do pay attention to what’s going on in the markets, you must read Warren Buffets SH letters.

 

He released one a few months ago, and I recently went back and read it again, especially after my girl Cathie Wood hurt me so bad. It’s so honest and the direct opposite of the crap you hear on quarterly SH calls by other companies.

 

It also tells great stories about people and his friends. To be so lucky to be in the circle of the Oracle.

 

Be safe out there! Make yourself invaluable!! Or come see us. We’re hiring!!! We were just voted a Great Place to Work® for the second year in a row!

 

Very truly yours,

 

Kevin

Upcoming Event - Health Supernova by Capital Factory 2022

May 9th-10th, 2022 - Dallas, TX

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Health Supernova in Dallas, TX will cover the hottest topics in health tech...

 

This event has a unique line-up of the hot topics in brain health:

  • Medical devices
  • Digital health
  • Genesis of prevention
  • AI and Machine learning
  • And more...

Network with the largest and highest quality collection of health startups, executives, investors, and more during Health Supernova. This event is presented by UT Dallas and UT Southwestern Medical Center on May 9-10, 2022, at Pegasus Park in Dallas.

 

We hope to see you there and check out the event agenda for this awesome line-up!

Device Talks Boston 2022

May 10th-11th, 2022 - Boston, Mass.

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DeviceTalks Boston will unite MedTech’s most innovative professionals...

And help attendees clear troublesome bottlenecks in these critical stages:

  • Innovation & Funding
  • Prototyping & Product Development
  • Manufacturing & Sourcing
  • Regulatory, Reimbursement & Market Development
  • Engineering Tools & Technology

Co-located with the Healthcare Robotics Engineering Forum and the Robotics Summit and Expo, DeviceTalks is an essential meeting for entrepreneurs, engineers, and other professionals developing the latest tools used to treat patients and cure diseases.

 

We hope to see you there and check out the event agenda for this awesome line-up!

CAPCON 2022

May 16th-17th, 2022 - Newport Beach, California

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In-person venture conference connecting healthcare investors and companies in real-time.

 

There are benefits for both parties going to this event:

  • Investors: Gain intimate access to dozens of emerging private and small-cap public companies.
  • Companies: Expand your investor base. Make new connections. And gain leading-edge insight on scaling your business using digital marketing and management strategies.

There will be educational content from major business influencers, investment professionals, legal professionals, and physicians.

M1 Applications Are Now Open! 

M1  MedTech is thrilled to announce that applications are open for our Fall 2022  cohort! We are seeking early-stage medical device companies that are ready to  bring the next big medical breakthrough to market.

 

🚀 Ready to launch? Head to our website, M1MedTech.com, to  submit your application by our May 31, 2022 deadline. We can’t wait to get  started!

 Catch All of Season 1 of the Inventing Tomorrow Podcast Now!


Listen HERE.

Catch us at our next event! We'd love to see you.

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