Cerebral Drew Investors With Prospect of Telehealth ‘Landgrab’
Federal scrutiny over startup’s prescriptions stirs discussion about venture capitalists’ role in funding behavior telehealth firms
A few months into the Covid-19 pandemic, as lockdowns were boosting demand for telehealth and venture capitalists were looking for the next big idea in that field, one startup pitched a chance to take advantage of a “once-in-a-lifetime sea change” in psychiatric care.
In a July 2020 pitch document, Cerebral Inc. cited a federal rule that was loosened amid the pandemic to allow telehealth clinicians to write prescriptions for controlled substances such as the stimulant Adderall. This new freedom to prescribe highly regulated drugs online, along with Cerebral’s medication-management service, therapy offerings and a planned app, would accelerate a “landgrab” and boost its revenue to $65 million from $6 million in 18 months, according to the pitch.