Former 'digital unicorn' Proteus files for bankruptcy

Smart pill manufacturer Proteus Digital Health has filed for bankruptcy after struggling to raise additional financing. 

Once valued at $1.5 billion, the Silicon Valley-based company founded in 2001 develops ingestible sensors that transmit when medicines are taken, plus a wearable patch reads the response. 

Proteus had already furloughed the majority of its employees in November 2019 and parted ways with development partner Otsuka in January. 

Working with Otsuka, Proteus had developed Abilify MyCite, the first ever approved “digital pill” that was designed to monitor adherence to medicines in patients with schizophrenia. 

Otsuka has reportedly acquired the full licence for the adherence technology, leaving Proteus to focus on using the technology in cancer and infectious diseases. 

But these plans are in serious doubt after the company said that it had run into a cash-flow crisis.

It owes more than $1 million to an office company and nearly $400 million to Otsuka’s affiliate in North America, according to the legal filing. 

Lawrence Perkins has been appointed as interim chief executive officer after time as the company’s chief restructuring officer. 

According to Bloomberg the company had a potential $15 million sale lined up of its digital health technology – a long way to fall for a company described as one of the first ever digital “Unicorns”. 

It had raised more than $500 million in venture capital funding from tech investors and pharma companies including Novartis. 

Even if Proteus finds its way out of this financial bind, there is competition on the horizon. 

In December the FDA approved an ingestible event marker from the privately-held digital health firm etectRx. 

Florida-based etectRx said its ID-Cap is the first device of its kind to transmit digital messages from within the body to an external receiver without need for the patch used with Proteus’ system. 

The system consists of the ID-Capsule, a standard pharmaceutical capsule containing the ingestible sensor known as the ID-Tag.