Otsuka intends to invest more than $300 million in an FDA-cleared software app that will apply cognitive therapy principals either with or without prescription drugs.
This morning Otsuka America, a subsidiary of the Japanese pharma company, announced that it is teaming up with Click Therapeutics, maker of software as a prescription medical treatment, to create a new digital therapeutic to treat major depressive disorder.
The goal of the partnership is to develop a software app that will employ cognitive therapy principles and can be used either with or without prescription drugs. Like many other digital therapeutics coming to the market, the companies plan to go through the FDA process and be classified as a Software as a Medical Device.
As part of the deal, Otsuka will be funding the development, first giving Click up to $10 million for regulatory and upfront costs, according to a statement from the companies. This will be followed by up to $20 million in development costs. When the product hits commercial milestones the digital health company will be getting $272 million from the pharma company, plus royalties.
Why it matters
Depression impacts over 300 million people a year, according to the World Health Organization, with 800,000 deaths from suicide per year. Cognitive behavioral therapy, interpersonal therapy and antidepressant medications are popular treatments for the condition.
However, the mental health sector is facing a global dearth of both trained professionals and financing, with the World Health Organization reporting that on average only 1 to 6 percent of health budgets are spent on mental health. Many are now turning to the digital space to address this problem.
“Our goal is to deliver evidence-based cognitive therapies to a broader population of patients with MDD than is currently feasible, due to the challenges of a shortage of mental health professionals and limited time for them to conduct cognitive therapy,” Kabir Nath, president and CEO, Otsuka North America Pharmaceutical Business Division, Otsuka America, said in a statement. “We are proud to be one of the few pharmaceutical companies that continues to invest in developing medicinal and digital products for the treatment of mental illnesses, and we are doing so by breaking down barriers and collaborating with leading therapeutic technology companies, such as Click, which share our vision.”
Digital therapeutics have become increasingly popular with digital health and pharma companies alike.
In 2018 digital therapeutics saw some major breakthroughs in the industry. Notably, in November reSET — a substance use disorder treatment, which was the first software-only therapeutic cleared by the FDA — announced that the software was commercially available for clinicians to prescribe to their patients.
This news was shortly followed by the announcement that FDA cleared reSET-O— a digital therapeutic to treat opioid use disorder jointly developed by Pear Therapeutics and Sandoz, a division of Novartis — a little over a year after it was granted an Expedited Access Pathway designation from the agency.
On the competition front, Pear is currently developing digital therapeutic for insomnia and depression in partnership with the University of Virginia.
This isn’t the first time a pharma company has shown interest in Click Therapeutics. In July the digital therapeutic developer landed $17 million in a funding round led by Sanofi Ventures, a subsidiary of Sanofi.
Otsuka also has a long history of involvement in the digital space. Notably, it teamed up with Proteus Digital Health on a sensor-carrying pill Abilify MyCite. The drug was approved by the FDA in November 2017, making it the first treatment delivery system to combine a drug with a digital ingestion tracking system. While it has been occasionally controversial, the companies continue to innovate using the sensors.
On the record
“Otsuka has established itself as the leading innovator in digital medicine for psychiatry, and we are thrilled to collaborate with their clinical and commercial experts on our CT-152 digital therapeutic for the treatment of depression. This collaboration symbolizes the growing recognition that digital therapeutics are a new category of treatment with the potential to become a routine treatment option for physicians for their patients,” David Benshoof Klein, chairman and CEO of Click, said in a statement. “The potential value of these treatments is clear: they provide validated tools that may be an effective treatment option to bring the power and accessibility of digital technologies for the benefit of the patient and physician. This recognition is also shared by regulators helping to build new pre-market review programs uniquely suited for digital therapeutics, while still retaining the traditional level of rigor and scrutiny that clinical studies require.”
Date: January 9, 2019