Former AT&T strategist launches search fund for mobile health rollup

By: Brian Dolan | May 28, 2013        

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Brian Dolan, Editor, MobiHealthNewsUp until a few weeks ago Mikhail Rozenfeld led business development and strategy for AT&T’s ForHealth Solutions group. Perhaps most notably he launched the company’s home health management and mobile personal emergency response product Numera Libris in February. Prior to Rozenfeld’s two years at AT&T, he worked at venture capital firm SFW Capital Partners as an associate, and now that he’s made his departure from AT&T he’s returning to venture capital. As a new VP at The Channel Group he is launching a search fund that aims to acquire a few early stage ventures or technologies to create a mobile health rollup.

Think Nant Health but on a smaller scale and with a focus.

“A specific example I can give you — and this is not something I will be investing in, I’m just giving an example to illustrate the point — if you pick asthma as an example, there are companies that specialize in asthma screening and diagnostics, companies like iSonea that have Wheezometer type products,” Rozenfeld told MobiHealthNews. “There are companies specializing in pulmonary therapy and disease management for asthma. There are companies that specialize in asthma medication compliance. All of those solutions might work great within their particular niche for this condition, but there is no comprehensive solution that can deliver an interoperable solution that can manage asthma from screening, diagnosis, through therapy, through compliance.”

While he’s not yet chosen a focus — the first stage of the search fund is to help determine that — he points to asthma, sexual transmitted infections, post- and pre-natal care, Parkinson’s, and multiple sclerosis as just a few potential directions.

Rozenfeld’s search fund is seeking investors for its initial $1 million seed round, which will be used to seek out acquisition targets, evaluate hundreds of companies and technologies, interview customer groups, and create a comprehensive analysis of the market. Investors in this stage of the search fund will be given access to the research produced and will also then be in a position to invest more for the acquisition stage, which might raise around $30 million depending on the specific companies that it seeks to acquire. Rozenfeld expects the search fund would only acquire three or four companies at first and some of those may be technology acquisitions or licenses from university innovation centers.

“A lot of these early stage companies don’t have the capacity — whether it’s [too few] employees or [insufficient] capital — to have two products, even though those two products are complementary and addressing the same condition,” Rozenfeld said. “It’s just very difficult for a company at the stage to do that.”

Rozenfeld acknowledged that there are a number of larger open API platform plays in digital health already, but none of them has been very successful. AT&T attempted one and wasn’t successful, he said, because they found that people working at health startups were often very passionate about their particular focus and they often believed the data their product generated was proprietary. Perhaps more importantly, he said they typically had no financial incentive for integration.

“A dermatology company is not going to go integrate with a food tracking company,” Rozenfeld said, “even though the data is valuable, there is just so very little incentive to do that.”

When an investor steps in or an acquiring entity rolls up a group of technologies the incentives for integration change, especially if one product in the portfolio has reimbursement. Rozenfeld believes this more comprehensive offering will also help bring in new customers who are not interested in adopting a series of point solutions.

“Just to stick with the asthma example, if I am working in a company that screens for asthma at the point of care, my distribution model is to convert a lot of primary care providers or pulmonologists,” Rozenfeld said, “and that takes a lot of time. Having the product combine with another technology may open up additional distribution opportunities for them.”

Rozenfeld and his team at The Channel Group have already begun discussing their plans with a number of potential investors and investment bankers. He claims this model will present a lower-risk alternative to incubator or traditional venture capital models. The team is also honing its strategy for the types of companies it is looking for — those at the seed funding stage or perhaps a larger startup that can serve as an aggregation platform for smaller companies. The focus on an integrated approach to one specific condition continues to be the search fund’s guiding light.

“If you read Lean Startup or understand what is being advocated at the accelerators, you know the strategy is to be simple and focus in on one little thing and get to market fast,” Rozenfeld said. “Startups often do that, and there is a lot of validity for those strategies, however, if you are too narrow and you take on a very difficult market to penetrate, there is a high chance you will run out of money before you even get to a paid pilot.”

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BodyMedia acquisition will steer Jawbone toward health plans, self-insured employers

By: Jonah Comstock | May 27, 2013        

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gI_0_BodyMediaCEOChristineRobins.JPGWhen Jawbone acquired BodyMedia last month, it made a big splash in the health and fitness tracker space: the two companies are both major, visible players in the quick-moving field, and we predicted that the acquisition would make other competitors like Fitbit and Basis nervous, and possibly lead to further acquisitions and mergers in the field.

MobiHealthNews caught up with former BodyMedia CEO, now BodyMedia general manager and VP of Health and Wellness Business Development at Jawbone, Christine Robins. Robins couldn’t say too much, but shared something of her vision for the newly merged company.

“Everybody assumed at some point that this was going to break, that somebody was going to get acquired,” Robins said. “There has to be consolidation in the category. Until Nike came along — even Jawbone, even though they’re privately held — it was all startups for the most part that were in this space. So you just know that the natural evolution for those investors, just by virtue of the business model, was a strategic exit. We’re really pleased to be the first one, we’re excited that [Jawbone] sees the space the same way.”

Robins scoffed at the idea — articulated in this Gizmodo column, for instance — that the acquisition was primarily an intellectual property grab for Jawbone.

“They obviously bought BodyMedia for a number of different reasons, one of which is the FDA [clearance], the science, the clinical nature of the product,” she said. “But how we combine these protfolios to maximize market penetration and demonstrate what a combined portfolio can do, we haven’t worked out all those details but I think it’s going to be a really exciting place. It became clear between the two companies where the broad market opportunities were — that you can have almost one stop shopping, in a sense. … They bring consumer design and simplicity and we can bring some of those things into the clinical arena, and vice versa. So we haven’t figured out all the details yet, but there’s absolutely no intent [on Jawbone’s part] to buy the business and shut it down for IP, let’s put it that way.”

The one-stop shop mentality is not just for the consumer, Robins explained, but also to leverage BodyMedia’s experience with B2B plays, including health plans and employers.

“There isn’t any one company right now, you know, before this acquisition, that could serve a really broad spectrum of the market,” she said. “We think it will start to change how not only consumers but the B2B customers, whether it’s health plans or employers, will think about this category. I can go to one company that can give me a really wide range of products. It’s not ‘I need to work with this company for this and I need to work with that company for this,’ which becomes really difficult for them to manage.”

Robins confirmed that BodyMedia’s product catalogue, announced at CES, is still on schedule, and will perhaps even be improved by the merger. The Core 2 Armband (now just called the Core 2) is currently scheduled for a September launch and will be upgraded shortly thereafter with an integrated heart rate sensor. The product, as it was announced in January, had a heart rate sensor built into an optional, attached strap. Robins also said the company’s alleged patent infringement suit against Basis Science, filed a year ago, would be continuing, unaffected by the acquisition.

Robins said she and Jawbone CEO Hosain Rahman share a vision for the future of the space: multiple sensors, from fitness trackers, environmental sensors, and other sources, integrated by an actionable data analytics platform.

“We were founded 14 years ago by a gentleman who was a PhD in machine learning and artificial intelligence,” Robins said. “So the hardware and the sensors, in a fashion, were really just a way to get data to feed this analyitics engine people are really just now realizing we have. Jawbone, thankfully, realized that capability and we have some other strategic customers and partners we’re starting to engage with because that’s where the future’s going to be. Right? How do you take your environmental sensors, your activity sensor, your blood pressure cuff, the pollen count that day off your phone — how do you bring all these things together to start to make recommendations for me, in the area I’m in, on any given day? … That’s where this category’s going. It’s not about the data, it’s not about the sensors, it’s about the analytics applied across the platforms.”

Xbox One, Kinect 2.0 and the future of health technology

By: admin | May 26, 2013        

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Marcelo Calbucci EverymoveMarcelo Calbucci is the Co-founder & CTO of EveryMove and a former development manager at Microsoft

Here is a bold statement: No other device, with the exception of the smartphone, will do more for the evolution of health technology than the Kinect 2.0 on the new Xbox One.

In case you are not a gamer or didn’t follow the news, the new Kinect comes packed with lots of high-end gear like a high-resolution digital camera, an infrared camera and several high-fidelity microphones. But those are just sensors, the magic happens on the software. Microsoft released the first Kinect just three years ago, but they’ve been working on the software for more than a decade, and they’ve built a platform, which means new apps (not only games) will be able to tap into an amazing source of information on our body.

The first category of games to benefit from these high-end sensors is fitness games, which are already leveraging the previous version of Kinect, and also made Nintendo’s Wii Fit hyper popular. Next generation fitness games will be able not only to tell you how to make a downward dog or a squat, but the games will be able to tell you to keep your back straight, or move your left foot six inches to the right. Now we can start imagining a RunKeeper or MapMyRun app for Xbox that focuses on training for a run that beautifully integrates with your training plan.

The fitness apps will be the first to come, and over the next one to two years we will see a flood of them. However, the apps likely to make the biggest difference in health will need another three to five years of development before they hit the market, but they will be nothing short of Sci-Fi turned reality. Keep reading>>

Three reasons FDA’s enforcement helps mobile health

By: admin | May 25, 2013        

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Bradley Merrill ThompsonBy Bradley Merrill Thompson

As MobiHealthNews reported earlier, this week FDA sent an enforcement letter to the developer of a urinalysis app. This might sound weird, but I believe that’s good news for the mobile health industry.

Full disclosure, I may have played a part in FDA’s decision to send that letter. Over the last several months, I’ve had four occasions to talk about the app publicly, including:

  1. A March editorial on the Medical Device and Diagnostic Industry (MDDI) website in which I began the public discussion by arguing the app required FDA compliance, but had none. Indeed, at the time, the manufacturer was claiming that the app wasn’t even a medical device.
  2. March testimony before a subcommittee of the House Energy and Commerce Committee to the same effect,
  3. Comments to the media and FDA at an April Politico event after the app made its debut on iTunes, and
  4. An interview by the Gray Sheet that published a very detailed story on Monday of this week. Indeed, the Gray Sheet also interviewed two professors to assess whether the app developer had sufficient clinical evidence in support of its claims.

I mention all of this because it seems relevant to the question I’m sure you’re asking yourself, does this FDA letter reflect a new trend by the agency or is this likely to be a one-off event? To me it seems unlikely FDA is now embarking on an enforcement campaign against violative mobile apps, at least until the final guidance is out.  Instead, I think FDA simply decided to respond to all of the public questions around whether apps trigger FDA requirements if they perform the same functions as traditional, regulated medical devices.

So why is this good news? Because the letter gives the mHealth industry, and particularly the segment of that industry focused on higher risk apps, some clarity with respect to the role FDA by law already plays. Keep reading>>

Former Epocrates CTO raises $2M from Khosla Ventures for new health startup, Gamgee

By: Aditi Pai | May 24, 2013        

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BobQuinnThis week, stealthy mobile health startup, Palo Alto, California-based Gamgee raised $2 million from Khosla Ventures, according to an SEC filing.

The company aims to make a healthcare app geared towards people who are chronically ill, CEO Bob Quinn writes in his LinkedIn profile. Very few details about the company are known, but Quinn, former Epocrates CTO, wrote that the startup’s long term plans include helping people get their healthcare questions answered. Quinn was an entrepreneur-in-residence at Khosla Ventures from June 2012 to January of this year.

Two months ago, Gamgee raised $500,000 from two investors. Like the most recent SEC filing, the only people named on the forms were Bob Quinn and Vinod Khosla, which might suggest Quinn hasn’t yet built a team.

Last month, Khosla Ventures led a round of funding for HealthTap, a doctor question and answer startup that helps patients find physician sourced answers to their questions online or through the associated mobile app. Khosla has also invested in medical peripheral device maker CellScope, behavior monitoring and analytics startup Ginger.io, wearable device makers Misfit Wearables and Jawbone, iPhone ECG developer AliveCor and appointment booking app ZocDoc. This past week, former Google executive Ben Ling joined Khosla Ventures as a venture partner, according to AllThingsD.

As CTO of Epocrates, Quinn was part of the team that led the company’s ill fated attempt at developing an EHR. MobiHealthNews interviewed Quinn back in 2010 to talk about the company’s EHR plans.

Quinn based his new startup’s name on a fictional character from J.R.R. Tolkien’s Lord of the Rings, Samwise Gamgee, who was reliable and helpful, as he believes the app will also be.

Health and fitness apps will be key selling points for smartwatches

By: Jonah Comstock | May 24, 2013        

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Research firm ON World is predicting a fitness tracking capability will be a top consumer requirement for forthcoming smartwatches.

“Some sports and fitness markets will be disrupted by the emergence of new general purpose mobile sensing products such as smartwatches,” Mareca Hatler, ON World’s research director, said in a statement. “Also, dedicated mobile sensing sports and fitness device manufacturers face intense competition from smartphones/tablets makers and app developers targeting integrated mobile device sensors.”

ON World smartwatchON World did a survey of 1,000 US consumers, asking them what factors they would consider before purchasing a smartwatch. Thirty percent cited fitness as the most important application, more than any other category. Another 18 percent listed health applications as most important. In addition, 20 percent of those consumers interested in buying a smartwatch at all were willing to pay at least $299 for a unit with integrated health and activity sensors.

ON World’s report, “Mobile Sensing: Sports and Fitness 2013″ on mobile sensing reports that 500 million mobile fitness and health sensors will ship in 2017. Two-thirds of these will be for activity tracking.

When ON World came out with its March prediction that 18.2 million health sensors would ship in 2017, they specifically excluded sports trackers, telling MobiHealthNews the category was large enough to merit its own report.

A recent report from IMS put the number of “sports and fitness monitor” shipments in 2017 at a much smaller 56 million.

ON World’s report comes out at a time of big fitness tracker news: Jawbone’s recent acquisition of BodyMedia is the first major consolidation in the tracker space, companies like Withings and iHealth Lab continue to add activity trackers to their product lines, and Bluetooth Smart is creating new possibilities for low energy wearable devices.

The report says that 150 million “mobile sensing health and fitness apps” have been downloaded, and by 2017 this number will have increased to 1.4 billion. Global cumulative revenues for mobile sensing apps and subscriptions will reach $975 million by 2017, the firm said.