Alydia Health Sees New Opportunities Through Acquisition by Merck Spinoff Organon

by | May 5, 2021 | Success Stories

Thanks to its recent acquisition by Merck on behalf of its planned spinoff of Organon, Alydia Health, a Fogarty Innovation graduate, is one step closer to its goal of eradicating postpartum hemorrhage (PPH), the leading global cause of maternal death. The deal is expected to close after Organon has successfully spun off from Merck as a standalone, publicly-traded company, with a focus on innovation in women’s health. 

Alydia Health was among the first companies to join Fogarty Innovation, and overcame the common challenges faced by early-stage startups by keeping its eye on the end goal — the wellbeing of the mother.

The company developed the Jada System, which is designed to stop PPH. Nearly 80% of PPH cases are caused by uterine atony, or the failure of the uterus to contract to its correct postpartum size, which leaves intra-uterine blood vessels fully dilated. Women suffering from this condition are at risk of severe and dangerous blood loss that can lead to injury or death. In the U.S., where PPH is less likely to result in death, it frequently manifests in blood transfusions or invasive surgery including hysterectomy.

Unlike other available treatments, Jada encourages the body’s natural response after childbirth by collapsing the uterus to its correct postpartum size, thus stopping PPH.

Important building blocks

Since graduating from Fogarty Innovation, Alydia Health initiated and completed a pivotal study in the U.S. that showed Jada’s ability to control PPH within a median of three minutes and prevent any further intervention. The results were published in the journal Obstetrics & Gynecologyand the study formed the basis of the startup’s submission to the U.S. FDA to obtain 510(k) clearance. 

This was just the first of several recent milestones, which included raising a Series C financing round of $13.9 million and welcoming Robert Binney (Rob) as new CEO to kick off the company’s commercial effort. Rob joined Alydia Health from Intersect ENT, where he grew the company to over $100 million in annual revenue.  

The team quickly created an early limited commercial plan, attracting strong sales talent and bringing on four seasoned startup veterans. “We started in October 2020 and through the fourth quarter of last year we really overachieved expectations, ending with 21 accounts, including a number of reputable healthcare systems,” said Rob. 

They then more than doubled the volume of sales the following quarter with the same size team, in part by maximizing reach within the larger healthcare systems. 

“We also started receiving a lot of unsolicited inbound interest because there’s such a ripe opportunity for a disruptive technology, a mechanical solution that mimics physiology,” said Rob.

Finding the ideal fit

Its acquisition by Organon is an exciting way to start the next chapter. Rob explains that the acquisition evolved naturally because all those building blocks were in place: strong clinical evidence, impressive market research that showed its potential and evidence coming from its first commercial forays supporting the value proposition. 

“We were incredibly fortunate to have multiple parties interested in acquiring the company, as well as many investors talking to us about opportunities to do a Series D or looking at other roll-up opportunities,” said COO Colby Holtshouse.

The team determined Organon was the best fit, given its primary focus on women’s health. “We look forward to participating in the building of what Organon has called a ‘medtech center of excellence’,” added Rob.

The group is particularly excited about Organon’s global mission, which is specifically focused on low- and middle-income countries, where they can get this technology to underserved communities and women in need. “That confirmed it wasn’t just about the top line, but a desire to satisfy that social impact mission we’ve all been so connected to throughout the years,” said Rob. 

Tips for early-stage entrepreneurs

With success like that, mining Alydia’s experience can be helpful to entrepreneurs wherever they currently are on the path. The team agrees that first there have to be several key factors: innovative technology, good data and an unmet need. 

In addition to those foundational elements, the group’s top advice is the importance of committing to and investing in a robust slate of clinical research — even if it’s not a requirement to get FDA clearance — as the evidence and outcomes will validate a startup’s opportunity when telling its story to both customers and investors. 

“I encourage everyone to carve out the time and dollars for robust research because it makes a huge difference in key opinion leader support and investor receptivity,” says Rob. 

And finally, remember it all comes down to the team’s resilience and conviction, notes Colby. “If you’re going to put yourself on the startup entrepreneurship roller coaster, make sure that you’re doing it with people who are as passionate as you are, who you can be real with and who will make the entire journey worthwhile.”

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