Health IT, Devices & Diagnostics

ResMed buys Propeller Health for $225M to enhance focus on COPD

Digital therapeutics company Propeller will continue to operate as a standalone business within ResMed's Respiratory Care portfolio.

ResMed, a San Diego-based medical device company, has entered an agreement to acquire digital therapeutics business Propeller Health for $225 million.

The organizations expect to finalize the deal before March 30, 2019.

Propeller will continue to operate as a standalone business within ResMed’s Respiratory Care portfolio. There won’t be any immediate changes to locations, business processes or management. Propeller Health co-founder and CEO David Van Sickle will keep his role and report to ResMed Respiratory Care president Richie McHale.

Founded in 1989, ResMed offers cloud-connected devices for sleep apnea, chronic obstructive pulmonary disease and other respiratory conditions.

Propeller Health, which was founded in 2010, is headquartered in Madison, Wisconsin and has an office in San Francisco. It provides sensors that can attach to inhalers. Said sensors are also paired with a mobile app so patients can track their medication use and gain insight into how to cope with their condition. The aim is to help patients with COPD and asthma reduce symptoms, build a stronger connection with their doctor and save money on unnecessary emergency care.

ResMed has its own set of ventilators for individuals with COPD, including products called Astral and Stellar. By scooping up Propeller, ResMed hopes to boost its position in the COPD space.

“Acquiring Propeller is a significant step for ResMed toward becoming the global leader in digital health for COPD,” ResMed CEO Mick Farrell said in a statement. “By working with Propeller’s existing partners to offer digital solutions for respiratory care pharmaceuticals and building our own proven ability to support digital solutions at scale, we can positively impact the lives of even more of the 380 million people worldwide who are living with this debilitating chronic disease.”

From the Propeller Health perspective, Van Sickle said that by combining forces with ResMed, his company can better serve patients across the chronic respiratory disease spectrum.

“[W]e’re looking to use a lot of the experience and infrastructure ResMed has built,” he said in a phone interview. Van Sickle also noted that the deal will give Propeller the resources and abilities to scale and commercialize its solution in the coming year.

Since its creation eight years ago, Propeller has secured nine FDA clearances and partnered with industry players like Novartis and Express Scripts. In 2016, the Wisconsin company secured a $21.5 million Series C financing round. Earlier this year, it closed a $20 million round and inked a strategic partnership with Aptar Pharma. The goal of the collaboration is to expand Propeller’s connected device capabilities beyond asthma and COPD inhalers to include other disease states. Shortly thereafter, Propeller announced a strategic investment of an undisclosed amount from McKesson Ventures.

Photo: Nicol??s Mero??o, Getty Images

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