Sramana Mitra: Let’s switch the discussion to pharmaceuticals and where drugs are now being enhanced by various kinds of digital monitoring or reporting. What are the trends there? It seems like you have penetration in that use case as well.
Raj Agarwal: One big trend on the pharma side is that they are recognizing that they need to be connected to the patient in terms of providing more support digitally. That’s one big trend where we talked about patient support programs. We see more and more companies going for that. Digital therapeutics is a different animal.
If you can generate better outcomes by connecting to patients and monitoring, you could claim that it is as good as medicine or any other treatment that they’re getting with or without traditional treatment. Now there is a way to get reimbursed for that if it’s an FDA approved product. It’s an upcoming trend.
Sramana Mitra: How many FDA-approved drugs are in circulation that have this characteristic of having a pill or an injection that is accompanied by some sort of digital monitoring?
Raj Agarwal: It’s only one or two.
Sramana Mitra: What would those be?
Raj Agarwal: There’s one that got an approval for ADHD.
Sramana Mitra: It’s really absolutely in the beginning of the trend.
Raj Agarwal: Yes.
Sramana Mitra: How does that work for you? If you’re enabling these use cases and it has to go through FDA, are pharmaceutical companies able to pay you if they cannot take it to market? Do you have to wait till they get FDA to be paid?
Raj Agarwal: The whole space is very new. There are different structures out there that one can fit into. This requires development costs. It’s a long-term play. It takes a few years before the software would get approved.
Sramana Mitra: But pharmaceutical companies are willing to pay you enterprise software license cost in the meantime while they’re waiting for FDA approval?
Raj Agarwal: I’m not going to say how they’re paying but they certainly would pay. One good example is a deal that was signed by Otsuka Pharmaceuticals and Click Therapeutic. It was announced last week. There’s a $300 million payment spread out over a period of time. It was milestones-based.
Sramana Mitra: A technology like yours is being treated as part of the drug discovery process. You go through FDA with the pharmaceutical companies essentially.
Raj Agarwal: Yes, I’m talking more of digital therapeutics in general. I don’t want to portray that we have something that we’re doing that is going through that.
Sramana Mitra: You said you are in the digital therapeutics business. You said that early on, didn’t you?
Raj Agarwal: Yes. We have lots of discussion going on.