Vitality Acquired By Healthcare Investor Soon-Shiong, Looks to Expand Wireless Products for Improving Healthy Behaviors

2/2/11Follow @xconomy

Cambridge, MA-based health IT firm Vitality announced today that it has been snapped up by a healthcare industry veteran and angel investor, Dr. Patrick Soon-Shiong. The acquisition, whose dollar value was not made public, will help Vitality expand its product line of wireless devices focused on encouraging healthy behavior, and better target insurance companies and healthcare plan providers to pay for the devices.

Vitality is the maker of GlowCaps, Internet-connected pill bottle caps that alert patients to take their medicine and send automated phone calls to patients who skip doses. The system helps caregivers and family members track down the real reason behind patients’ delinquency and help develop action plans to keep them on track and improve wellness.

Soon-Shiong was an early investor in Vitality, alongside MIT Media Lab founder Nicholas Negroponte and a crop of other angel investors. Soon-Shiong was previously the executive chairman of Los Angeles-based Abraxis BioScience, which sold to Celgene (NASDAQ: CELG) last year in a deal that valued Abraxis at $2.9 billion. He’s now focused on improving healthcare through patient-centered approaches and innovative technologies, through a venture known as the AAAH (All About Advanced Health) Project, Vitality president Joshua Wachman told me on a call today. “We fit in there nicely,” he says.

The Vitality management team will stay in Cambridge and will be expanding, to complement other teams that are part of Soon-Shiong’s operation in Los Angeles, San Diego, and Toronto. Wachman and Vitality CEO David Rose will retain their existing titles.

Vitality has focused largely on getting the GlowCaps systems to patients through partnerships with big pharma companies like Novartis, who stand to earn more on drug brands if patients take all their pills as prescribed. But the union with the AAAH project enables Vitality to better connect with insurance companies and big employers who are paying for healthcare plans, and are “confounded with the rising healthcare costs,” Wachman says. Vitality thinks its devices will help providers keep healthcare costs down by encouraging healthier behaviors.

The company also sees its device taking off this year with specialty drug markets, for rarer conditions like HIV infection and organ transplants, where adherence to prescriptions is even more crucial.

The newest edition of the GlowCaps system sends data to the Vitality network over the AT&T wireless network. The data from the GlowCaps system is managed through a device that the company calls the Home Health Hub, which resembles a nightlight and plugs into a wall socket. Wachman says the acquisition enables Vitality to use this component to connect with other devices focused on encouraging healthy behaviors, in areas from sleep to diet and exercise.

“There are other devices and services that we can layer in using that connectivity in service of better health and wellness,” he says. “The acquisition gives us more resources and more reach to bring it to market. Later on this year, we’ll be releasing a couple of other products that will look like they fit in the family.”

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