It could be an app, or it could be an autoinjector - there are more than 500,000 medical technologies seeking to innovate, or distribute, in the healthcare industry.
MedTech can be considered as any technology used to save lives in individuals suffering from a wide range of conditions. In its many forms, MedTech is already diagnosing, monitoring and treating virtually every disease or condition that affects us. A recent report from market intelligence firm Evaluate projects the global MedTech market to grow 4.1% annually between 2014 and 2020, reaching $476 billion by the end of the decade.
Why do families like investing in MedTech? At what stage do they get involved?
Investing in MedTech allows families to achieve various impact investing goals but there are other reasons too. Firstly, there is money to be made. Humans will always suffer from medical conditions and need ever-improving medical care. If an investor is able to negotiate the various investment risks associated with venture-stage medical device investment then the returns can be significant. Another driver of investment by families are in areas in which that particular family has been affected. For example, if a loved one has been affected by a particular disease or condition then quite often family members will want to invest in solutions to help other sufferers and their families.
Are there certain areas families prefer?
The areas of healthcare that appeal to a family can vary – from investing in a technology close to the investor’s heart, to an area in which the potential for high levels of disruption exists. In today’s sector there is a lot of interest in digital healthcare which can include anything from mobile apps that assist in the diagnosis or treatment process, to e-health and using big data to better respond to a patient’s needs. These technologies are disrupting the traditional “supply chain” of healthcare and giving a lot more control to the patient, while also freeing-up the clinician’s time.
How much are families typically investing and what’s the typical ROI?
There are too many variables with MedTech investments to offer a “one-size-fits-all” answer. When and how much a family invests will be determined by their risk appetite - among other factors. Investing in early-stage companies means family offices have the potential for bigger returns and the ability to have a greater impact on the growth of the company. However, there are risks including regulatory hurdles (will the technology receive regulatory approval?) and will the product achieve the reimbursement and commercial potential the founder predicts? To help mitigate this risk we have seen both single and multi-family offices bring a healthcare expert onto their team who fully understands the complexities and technical aspects of the sector to help drive a successful investment strategy.
BioMarker Strategies was founded to address the reality that available biomarker tests for solid tumors primarily rely on dead, fixed tissue samples. Biomarker tests are used to perform a clinical assessment to monitor the health of individuals so that appropriate care can be planned. They provide only indirect information regarding cell signalling pathway response to targetted therapies and do not accurately predict individual response.
BioMarker Strategies developed the SnapPath® Cancer Diagnostics System to guide targeted drug development and treatment selection for solid tumors. SnapPath® keeps cells alive on the instrument, exposes them to targeted therapies, and helps understand mechanisms of acquired resistance.
SnapPath® enables a new class of biomarker tests that are much more predictive of individual response, because they are based on the dynamic functional signalling information available only from live cells. Patents have been granted in Europe, the United States, Australia and Hong Kong.
SnapPath® is ideally suited to assess response to targeted therapies in development to treat solid tumors. BioMarker Strategies is actively seeking funded commercial collaborations, and expects to enter into its first commercial collaboration soon.
The company is currently raising $4 million in Series A financing for execution of its business plan through achievement of self-sustaining revenues by year-end 2017. Management expects that this is likely to lead to an exit via acquisition within three to five years post-funding.
CambFix has developed a platform technology that delivers a comprehensive trauma fixation system. It can be used for a wide range of conditions including definitive management of fractures, deformity correction and soft tissue stabilisation. The first generation of CambFix products have a global patented technology that addresses problems related to current treatment methods. Each fracture currently needs either interventional surgery or immobilisation in a cast to fix it with extensive physiotherapy afterwards to rehabilitate the patient. A third develop a complication ranging from stiffness through to infection and repeat surgery. Cambfix has addressed the unmet need by developing a fully patented, CE-marked PolyArmour™ fracture fixation system. The Cambfix device (PolyArmour™) eliminates the need for surgery and need for physiotherapy. It is easy to apply, adjust and remove whilst enabling the surgeon to ‘lock’ it to prevent patient interference. It has the potential to offer considerable savings to the healthcare industry while improving the patient experience and outcome. The first available product is for wrist fractures. It is seeking £800,000 (over a period of 18-24 months in order to: complete a marketing trial to establish the specific indications for which the device can become the preferred treatment of choice and to provide clinical proof of efficacy; use these data to obtain US Regulatory clearance (through the 510(k) route) and reimbursement as a ‘fixator’ device; and bring one new design (elbow and upper limb fixator) to a working prototype stage.
NeuroRx is the product of 30 years and more than $100 million in funded research led by Prof. Daniel Javitt, M.D., Ph.D. into the role of the N-methyl-D-aspartate receptor (NMDA) receptor in human thought processes and psychiatric illness. Abnormal expression levels and altered NMDA receptor function have been implicated in numerous neurological disorders and pathological conditions. NeuroRx has developed Cyclurad™, which targets suicidality and depression in patients with bipolar disease. Of the 2.8 million who experience bipolar depression, approximately 400,000 per year experience acute suicidal crisis which kills one in four within weeks without often involuntary hospitalisation, sometimes combined with electro-convulsive therapy. Cyclurad™ targets the brain’s NMDA receptor, which is currently not targeted by any approved medication. Peer-reviewed phase II human studies performed by independent academic researchers have demonstrated a nearly instant (within hours) 50% decrease in depressive symptoms and a 75% decrease in suicidality with effects sustained for eight weeks. NeuroRx is led by Dr. Jonathan Javitt, who brings a background of more than 10 successful drug and medical technology companies with public exits. NeuroRx expects to initiate phase III pivotal trials in 2016. NeuroRx’s directors include Chaim Hurvitz, past President and Director of Teva, Inc., James Lawrence, past chairman of Rothschild NA, and Wayne Pines, former associate commissioner of the US Food and Drug Administration.
Oval designs and develops autoinjector platforms for multiple applications in the injection market. Designs are small, intuitive to use, shown in studies to be preferred by patients and can be used correctly without training. Current autoinjectors are prone to numerous user errors and have been recalled from the market for reasons; including breakage, failure to give the correct dose and drug stability issues.
Allergies are growing along with the incidence of anaphylactic shock. Sales of life saving adrenaline injections have reached $1.2 billion and growing at 10% p.a. EpiPen has 85% market share and was designed in 1950s for use by soldiers. It is large and 40% of patients fail to use it correctly. Oval is developing and commercialising an adrenaline pen which will take circa 25% market share within four years.
Biologics have a major future role in drug treatment as there are currently 1,241 biologics in pharma development pipelines. These drugs have to be injected and current autoinjectors have poor performance and reliability. Oval has developed a platform specifically for biologics and has a pipeline of pharma companies interested in the technology.
Oval has a clear business strategy to commercialise drug device combinations that will provide high value investor returns.
Personal MedSystems is a German MedTech company, founded in 2008, that develops products and services for mobile health with focus on instant cardiac monitoring. Their objective is to develop professional electrocardiogram (ECG) systems that are implemented in personalized applications and used by private individuals.
Personal MedSystems has developed CardioSecur, the first smartphone based 22-lead mobile ECG (12 standard leads plus V7-V9 and VR3-VR9) for patients and physicians. While conventional ECG systems use 10 electrodes to depict 12 standard leads, the innovative systems of CardioSecur, requires only four electrodes to realise a 360-degree view of the heart. CardioSecur’s four electrode technology has been clinically validated and is an excellent alternative to 10 electrode systems.
However, as most patients cannot read an ECG, CardioSecur provides an instant and personalised evaluation of the ECG recording and offers patients an immediate recommendation to act according to the applicable guidelines of professional cardiological associations. Consequently, Personal MedSystems has developed an easy-to-use ECG that allows cardiovascular patients to gain more certainty about their cardiac activity anywhere, anytime. Additionally, it enables physician to diagnose heart diseases faster as treating physicians can access their patients’ ECG recordings through a secured database to which the recordings are automatically uploaded.