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Propeller Health Raises $20M to Move Beyond Respiratory Disease

Xconomy Wisconsin — 

[Updated 5/30/18 7:53 a.m. See below.] Since launching in 2010, Propeller Health has kept its focus on developing connected devices and complementary software for patients with respiratory disease.

But that could soon change, following Madison, WI-based Propeller’s announcement on Wednesday that it plans to work with Aptar Pharma to develop digital health products for treating conditions other than asthma and chronic obstructive pulmonary disease.

The deal deepens the existing partnership between Propeller and Aptar Pharma, which is part of Crystal Lake, IL-based AptarGroup (NYSE: ATR). The two companies began working together in 2016 to build a connected metered dose inhaler from the ground up.

Propeller also said it’s raised $20 million in new financing, with Aptar Pharma providing half of the total. Other participants in the funding round included return backers Safeguard Scientifics (NYSE: SFE), Social Capital, Hikma Ventures, 3M Ventures, and SR One, Propeller said. The startup has now raised $65.5 million in total from investors, said Propeller co-founder and CEO David Van Sickle in an e-mail. [Updated with information from David Van Sickle.]

Propeller’s products sit at the intersection of several current trends in healthcare, such as efforts to reduce costs by avoiding hospitalizations and using technology to improve patient adherence to treatment programs. Now the question is whether Propeller, working with Aptar Pharma, can build on the success it’s had in respiratory disease and successfully develop connected devices for other therapeutic areas.

“We now have the foundation in place to bring the benefits of digital medicines to many new conditions,” Van Sickle said. He said the partnership will initially focus on injectables for severe asthma, and then therapeutic areas such as immunology, diabetes, migraine, and “other diseases with [a] high unmet medical need.”

Propeller’s system combines sensors, mobile apps, software analytics, and patient-specific feedback. Its Internet-connected devices are designed to help patients manage their conditions by providing caregivers data, including when and where patients are taking their medications.

The expanded partnership brings together Aptar Pharma’s medical device manufacturing chops with Propeller’s experience in digital health and management of chronic conditions.

The companies’ collaboration to develop a connected inhaler from scratch involves licensing it to a third-party pharma business, which would bring the device to market in combination with its medicine, as Van Sickle explained in 2016. (Despite its name, Aptar Pharma is not a drug maker, though it has for decades manufactured and supplied valves, stems, housings, and other components for inhalers.)

Propeller and Aptar Pharma said they would likewise team up with one or more outside pharmaceutical firms to develop and commercialize digital devices and software developed by the two businesses. They could include products that deliver medications orally, nasally, topically, or by injection, the companies said.

They said they’ll co-market any products they develop together, with Propeller managing digital services and Aptar Pharma in charge of device development, manufacturing, and supply chain.

Propeller says it currently has eight FDA clearances, as well as a CE marking for Europe. Patients and healthcare providers in the U.S., Europe, and Asia use devices developed by the 75-employee company, according to a spokesperson for Propeller.

The startup has previously partnered with other pharma companies, such as GlaxoSmithKline (NYSE: GSK) and Boehringer Ingelheim, to develop and manufacture custom sensors for their inhalers.

Propeller’s main business model is to partner with health systems, insurers, employers, municipal governments, and other groups, who pay for the use of the devices and related services by their patients, members, employees, and citizens. Propeller’s products have been used by patients through more than 60 commercial programs across the U.S., the startup says, and its clients include Dignity Health in California, the Wyckoff Heights Medical Center in New York, and the city of Louisville.