Smart-pill maker raises $172 million; investors still hungry for digital health

Startup Proteus Digital Health, whose flagship product is essentially a smart pill to help patients and doctors monitor medication adherence and data, has raised $172 million in new funding, demonstrating investors continued strong appetite for digital health opportunities.

The Redwood City, Calif.-based company's main product is its Food and Drug Administration-cleared Helius system. The concept is simple: along with their regular medication, patients swallow a digital pill. The pill’s sensor is able to track its passage as it passes through the body. It sends that data to a patch, which also tracks a variety of physiological data. The patch then conveys the data to a patient's smartphone, which in turn periodically sends data to the doctor or trusted caregivers, who can track whether patients are taking their medication, along with their response.

Proteus's website also hints at some of its future plans, including putting sensors on a pharmaceutical itself, sparing patients the need to swallow two pills. The firm is reportedly collaborating with Novartis and Otsuka Pharmaceutical, both investors in previous funding rounds.

The company's successful financing round shows continued strength in the digital health sector where startups raised $2.3 billion in the first half of the year, more than for all of 2013.

Follow Darius Tahir on Twitter: @dariustahir