Propeller Health

Propeller Health's sensor fits onto inhalers and uses a software platform approved by the U.S. Food and Drug Administration to help people with asthma or COPD better manage their condition.

Propeller Health, a Madison company whose products help people with chronic respiratory ailments, will be purchased by ResMed, a publicly traded San Diego medical device company, for $225 million, the companies said Monday.

Propeller makes sensors and software that work with inhalers used by people with asthma or COPD (chronic obstructive pulmonary disease) to track when their attacks occur and help them prevent respiratory emergencies. Its devices are being used by more than 25,000 people in 16 countries.

CEO David Van Sickle said joining forces with ResMed will let Propeller help more people, more rapidly.

“Joining forces enables us to accelerate the adoption of Propeller’s solutions at a global scale and serve as a powerful platform for a broad set of pharmaceutical and health care partners,” Van Sickle said.

He said ResMed is a leader in the field.

“About 6 million people are using their connected devices,” Van Sickle said. “This is going to give us the opportunity to take advantage of everything ResMed has learned and the infrastructure they’ve established.”

ResMed, founded in 1989, had $2.4 billion in revenues in 2017 and has 6,000 employees. Its devices are aimed at patients with sleep apnea, COPD and other respiratory diseases. Its mission is “to change 20 million lives by 2020,” ResMed’s website says.

Propeller Health will continue to operate as a stand-alone business under Van Sickle’s leadership, with its headquarters in Madison and a San Francisco office.

Propeller has 104 employees — 70 of them in Madison, 30 in San Francisco and four who work remotely.

“We’ll definitely be adding to the team,” Van Sickle said, but he said it’s too soon to say how many will be hired.

A former asthma and respiratory disease researcher with the Centers for Disease Control and Prevention and UW-Madison, Van Sickle co-founded Propeller in 2010 with Greg Tracy and serial entrepreneur Mark Gehring.

Van Sickle said working at the CDC helped him realize that not enough was being done to keep people with asthma from landing in the emergency room, even though physicians were being encouraged to see if treatments really were improving their patients’ lives.

“But there really were few tools for them to use. I realized that how often a person uses their medication was actually an important marker, a vital sign of how they were doing, and would provide the missing piece of information. From there, we started connecting medications and developing the digital experiences to help people improve their self-management,” Van Sickle said.

Studies have found that using Propeller’s technology has eased symptoms for many asthma sufferers. A major study involving more than 1,000 residents of Louisville, Kentucky, in 2015 showed an average 82 percent reduction in their use of emergency inhalers.

Since it was founded, Propeller has raised nearly $70 million from investors — nearly all from outside Wisconsin — including venture capital offshoots of 3M and GlaxoSmith-Kline, as well as early supporters The Social+Capital Partnership, of Palo Alto, California, and Safeguard Scientifics in Wayne, Pennsylvania.

“I think the Propeller Health acquisition shows that it is more than possible for Wisconsin-based companies to raise money from outside Wisconsin without being forced to move,” said Tom Still, president of the Wisconsin Technology Council.

Madison’s longtime investment firm, Venture Investors, did not invest in Propeller Health, but managing director John Neis said he has watched the company’s progress.

“I am very happy for the founders of Propeller,” said Neis. He said Propeller is at the “intersection of medical devices and healthcare IT, and both are areas where Madison has historic strength.”

Van Sickle said acquisition talks began after ResMed took part in a $20 million investment round in May. Aptar Pharma, of Crystal Lake, Illinois, also invested in that round and began partnering with Propeller to develop new products.

Van Sickle said that effort will continue, and prospects could include technology to help people with diabetes or migraine headaches.

Co-founder Gehring, who is now with two other health technology companies in Madison, HealthMyne and ImageMoverMD, credits Van Sickle for the company’s success.

“His brilliance, his vision — his whole passion is about getting the solution out to patients. And that’s what drives him,” Gehring said.

ResMed and Propeller said they expect to finalize the deal by the end of March, if regulators approve.

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David Wahlberg is the health and medicine reporter for the Wisconsin State Journal.

Judy Newman is a business reporter for the Wisconsin State Journal.