Dive Brief:

• Medical device maker ResMed has agreed to acquire Propeller Health, creator of a digital platform that seeks to help people with asthma and chronic obstructive pulmonary disease (COPD) manage their conditions.
• Propeller’s sensors attach to a patient’s inhaler and are linked to a mobile app that automatically tracks medication use and provides feedback.
• ResMed will pay $225 million for Propeller. The companies expect to finalize the deal before March 30, 2019.

Dive Insight:

By focusing on respiratory disease, ResMed and Propeller are addressing a sizable medical market. About one in 12 Americans, or 25 million, have asthma, according to the Centers for Disease Control and Prevention. More than 11 million people are known to have COPD, according to the American Lung Association, with many more Americans thought to be unaware of having the condition. COPD is the third leading cause of death in the United States.

ResMed's acquisition of Propeller follows a growing trend by device makers to acquire or partner with digital technology companies. A new survey by AdvaMed and Deloitte found 82% of medtech companies planned to collaborate with such non-traditional partners. Traditional device makers are moving outside of their core competencies and incorporating sensors and software into their products to generate and transmit data, the report found.

San Diego-based ResMed, which also makes devices to treat sleep apnea, said the acquisition of Propeller will set it up to sell COPD patient management across all stages of the disease. Propeller contends its products have demonstrated a 58% improvement in medication adherence, 48% increase in symptom-free days and 53% reduction in emergency room visits.

Propeller said the acquisition by ResMed will accelerate its growth on a global scale and expand its reach among pharmaceutical and healthcare partners. Its digital platform, which can support stage II and stage III COPD patients, complements ResMed’s suite of cloud-connected ventilators for stage III and stage IV COPD patients and its portable oxygen concentrator Mobi, the companies said.

Madison, Wisconsin-based Propeller, which also has an office in San Francisco, will continue to operate as a standalone business within ResMed’s respiratory care portfolio. David Van Sickle, co-founder and CEO of Propeller, will continue in his current role and will report to McHale. No immediate changes to management, locations or business processes are planned.