A forerunner in ‘smart pills’ adopts a new tack as key pharma partnership unravels

SAN FRANCISCO — It was supposed to be a showcase for the way in which technology can revolutionize how some patients take their medications — and ultimately improve health outcomes. It has proven far more complicated.

Proteus Digital Health, a Silicon Valley company, raised close to $500 million and soared to a valuation of $1.5 billion on the promise that its sensor technology could be used to monitor whether patients with a wide range of health conditions have taken their pills. Then, late last year, the company’s funds fell dangerously low.

Now, Proteus’ CEO, Andrew Thompson, told STAT that the company and Japanese drug maker Otsuka Pharmaceutical have prematurely in which Otsuka had been paying Proteus to help it develop a portfolio of digital medicines for serious mental health conditions. That revenue source for Proteus is now gone — and it from the Food and Drug Administration.