Proteus Digital Health has struggled to find a market for its digestable sensors and wearable patches, leaving the company desperate for cash.
But Proteus has struggled to turn its vision into reality and is now desperate for cash after an expected $100 million funding round recently fell through, according to people familiar with the matter. To preserve enough money to stay afloat, the company furloughed the majority of its employees for about two weeks in November, said the people, who asked not to be named because the information is confidential.
As 2019 wraps up, Proteus has become the latest Silicon Valley company that's gone from a one-time high flyer, raising a total of over $500 million, to deep in crisis mode after its partnership with a large pharmaceutical company failed to materialize in a way that could justify its valuation. It's an ominous sign for the, which has lured major investors but has struggled to find breakout successes and has seen big drugmakers walk away from key partnerships.
At Proteus, the furloughed employees were brought back to work in recent weeks after the company was able to land $5 million in emergency funding, according to people with knowledge of the matter. But with roughly 300 people on staff, according to LinkedIn, that money may not last long. Executives at three other digital health companies said they've seen an uptick in resumes from Proteus employees in the past few weeks.
"Proteus is currently conducting an operational review and restructuring our business to optimize effectiveness," a company spokesperson told CNBC in an email. "We are taking into consideration the impact of our restructuring on employees, patients, customers, partners and investors." The problem Proteus was trying to tackle is real. Patients don't always take their meds and don't necessarily know if they're up to date with them. Researchers estimate that a lack of adherence to prescriptions results inA digital sensor the size of a grain of sand is housed in a pill. After being swallowed, its signal is picked up by a patch worn on the body, which relays data to a phone or tablet.
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