Elon Musk says a human received a Neuralink implant

Brain chip company Neuralink has implanted its first device in a human, according to the billionaire co-founder's Tweet late yesterday. The company hasn't shared other details, but Musk said the patient is "recovering well" and that initial data show "promising" neural signals.

Musk later Tweeted that Neuralink's first product, designed to control phones and computers, is called "Telepathy." It'll be offered first to people who have lost use of their limbs, he said.

While Neuralink was cleared last year to run human trials, experts told STAT then that it's decades behind competitors: Blackrock Neurotech planted the first brain-computer interface device in a human in 2004. Neuralink is also reportedly under federal investigation for violating animal welfare standards, having killed more than 1,000 animals including pigs and monkeys, as it races to catch up. We'll be following the news today.

venture capital

Where have all the unicorns gone?

The unicorn birth rate has dropped precipitously. Just two digital health companies — behavioral health directory Headway and pharmacy benefits manager CapitalRx — achieved more than a $1 billion valuation in 2023, according to calculations and analyses by venture capital database Pitchbook. That's down from the health tech unicorn heyday of 2021 and 2022, which saw a herd of companies such as Transcarent, Oura, Benchling and Cerebral tip into the billion-dollar zone. (Perhaps unsurprisingly, California still hosts the lion's share of unicorns, followed by New York.)

In a difficult funding environment, unicorn-status is no longer a guaranteed indicator of success or potential, Pitchbook health analyst Aaron DeGagne tells me. The roughly 70 current digital health unicorns raised a combined $12 billion in 2021, but just $4.8 billion and $1.2 billion in 2022 and 2023 respectively.

Still, DeGagne expects a handful to go public this year: potential IPO candidates are Noom, Ro, Spring Health, Hinge Health, Headspace and Quantum Health. This year's pivotal for the sector, he said: "It's a question now of which of these unicorns will emerge and become longterm, and scale."

The new landscape, and uncertainty about some of these companies' longevity, could raise the bar for payers considering contracts. "Payers aren't going to work with everyone that comes to them," he said.

Goodbye, mega-rounds

Venture research firm CBInsights is out with its own digital health assessment this week. Among trends that caught my eye: Gone are the days of hundred-million dollar or more funding rounds, which peaked in 2021. See two charts from the report below.

Screen Shot 2024-01-30 at 8.17.48 AM

Screen Shot 2024-01-30 at 8.16.52 AM

Alzheimer's watch

Cognito raises $35 million for Alzheimer's device

Fascinating progress in our understanding of Alzheimer's this week. My colleague Drew Joseph has a must-read story on the first-ever transmitted Alzheimer's cases. And back at the Health Tech desk, Mario reports on medical device company Cognito Therapeutics' latest funding round as it develops treatment alternative to drugs.

Cognito, Mario writes, is building a headset that uses gamma frequency, light and sound stimulation to stave off cognitive decline. Patients use it for about an hour a day. Read more.

cybersecurity

Hospitals prep for a whole new world of cyber threats

The advent of generative AI has brought much discussion about clinical and diagnostic aids. But health leaders tell me there's a more pressing short-term issue: hackers harnessing generative AI to write code for malware, spin up more convincing phishing emails and even identify network vulnerabilities. The sector is widely known for its outdated protections; more than 116 million people were impacted by data breaches in 2023, largely from ransomware and hacking, Katie reported previously.

"It's a huge concern," Samantha Jacques, a medical device cybersecurity expert at McLaren Health Care and member of the cyber committee within the Health Sector Coordinating Council, told me. "The risks keep growing, and we don't necessarily have a way to combat them." Read more on the threat landscape and how providers are preparing here.

the view from washington

FTC examining AI investments and partnerships

The Federal Trade Commission is conducting a "market inquiry" into companies including Amazon, Alphabet, Microsoft, Anthropic and OpenAI on collaboration between AI companies and cloud providers, CNBC reported late last week. OpenAI is best known as the developer of the ChatGPT tool.

"At the FTC, the rapid development and deployment of AI is informing our work across the agency," chair Lina Khan said an FTC AI summit. "There's no AI exemption from the laws on the books, and we're looking closely at the ways companies may be using their power to thwart competition or trick the public."

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What we're reading

DOJ probes AI tools in patient records, Bloomberg Law
What NEJM AI editors want to publish, NEJM AI
Co-designing health tech with Australian First Nations groups, The Lancet Digital Health

Thanks for reading! More on Thursday - Mohana

Mohana Ravindranath is a Bay Area correspondent covering health tech at STAT and has made it her mission to separate out hype from reality in health care.