Otsuka and Proteus Expand Collaboration with $88 Million Investment for Digital Drug Development
Recently, VCBeat (WeChat ID: VCbeat) learned that U.S.-based Proteus Digital Health (“Proteus”) and Japan’s Otsuka Pharmaceuticals (“Otsuka”) have announced an expansion of their existing partnership by signing a new five-year collaboration agreement aimed at developing next-generation ingestible sensors.
VCBeat has learned that Abilify MyCite, a schizophrenia medication developed by Otsuka and equipped with a novel sensor, sparked significant discussion in the medical community both in China and abroad after receiving approval from the U.S. Food and Drug Administration (FDA) last year. The sensor and custom patch used in this medication were provided by Proteus.
It is reported that, as part of the expanded collaboration, Otsuka has transferred $88 million in equity and other payments to Proteus to support joint research and development in mental health, including the commercial development and market coordination of Abilify MyCite.
Abilify MyCite is a schizophrenia medication developed by Otsuka that incorporates a novel sensor. It received approval from the U.S. FDA last December for the treatment of psychiatric disorders, including schizophrenia and bipolar disorder. Abilify MyCite features an ingestible sensor embedded within the tablet. When paired with a wearable biosensor patch, it transmits data collected by the sensor to a smartphone application. These sensors can track drug ingestion, absorption, and metabolism, as well as the physiological effects of the treatment.
The embedded sensor in Abilify MyCite is merely 1 millimeter in size—comparable to a grain of sand—and is composed of ingredients derived from food. It is activated by gastric acid and, within 30 minutes to 2 hours, transmits an electronic signal to a wearable sensor patch to record adherence, after which it is eliminated from the body.
This approval also represents a historic step for the FDA, as the agency has never before approved a combination of drug and software like Abilify MyCite. Notably, Abilify MyCite was approved by the FDA solely for monitoring medication ingestion, not for improving adherence.
According to industry insiders, the total value of the transaction between Otsuka and Proteus is estimated to be between $500 million and $700 million. The expanded collaboration includes the development of digital therapeutics for severe mental illnesses, potentially involving the integration of Proteus’s ingestible sensor technology into new smart pills, as well as the development of next-generation product features and sensor capabilities. Meanwhile, this deal is expected to boost Proteus’s valuation. Previously, Proteus had completed 11 rounds of funding totaling $487 million, achieving a valuation of over $1.5 billion and early entry into the ranks of unicorns.
About Otsuka
Otsuka is a Japanese pharmaceutical company established in 1964, with headquarters in Tokyo, Osaka, and Naruto City, Tokushima Prefecture. Its predecessor was the Otsuka Pharmaceutical Factory in Japan. Rather than pursuing a strategy of acquiring major pharmaceutical companies, Otsuka has expanded through acquisitions in health-related industries to build a comprehensive healthcare group.
About Proteus
Proteus is a digital medicine company founded in 2001 and headquartered in California, United States. The company is dedicated to developing digital health products that collect various human metrics related to behavior, physiology, and treatment, including medication adherence, heart rate, sleep patterns, physical activity, and stress levels, thereby providing consumers with personalized health management tools.