July 2016 SAMPLE PAGES PAGES | SAMPLE Pages... · Unique insight into current and future pharma market dynamics through quantitative surveys with physicians, providing essential data

Digital Health Startups

July 2016

A FirstWord ExpertViews Dossier Report

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Published July 2016© Copyright 2016 Doctor’s Guide Publishing Limited

All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.

This report contains information from numerous sources that Doctor’s Guide Publishing Limited believes to be reliable but for which accuracy cannot be guaranteed. Doctor’s Guide Publishing Limited does not accept responsibility for any loss incurred by any person who acts or who fails to act as a result of information published in this document. Any views and opinions expressed by third parties and reproduced in this document are not necessarily the views and opinions of Doctor’s Guide Publishing Limited. Any views and opinions expressed by individuals and reproduced in this document are not necessarily the views and opinions of their employers.

Cover image: © everythingpossible | AdobeStock

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All Contents Copyright © 2016 Doctor’s Guide Publishing Limited. All Rights Reserved

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ContentsExecutive summary .............................................................................................................................. 1

Research objectives and methodology .................................................................................4

Digital Health Startups Expert Contributors ......................................................................6

Pharma Company Expert Contributors ..................................................................................8

Digital Health Startups: Company profiles and analysis ........................................10

In-depth profiles .......................................................................................................................................10

Accel Diagnostics ...............................................................................................................................10

Kit Check ...............................................................................................................................................14

LuminaCare Solutions .......................................................................................................................18

Omada Health .....................................................................................................................................22

Proteus Digital Health .......................................................................................................................26

Zocdoc ...................................................................................................................................................30

Summary profiles .....................................................................................................................................33

Dexcom .................................................................................................................................................33

Fit4D .......................................................................................................................................................35

RxREVU ................................................................................................................................................ 37

Tute Genomics .....................................................................................................................................39

Trends underlying the growth of digital health technology .................................. 41

The growth of smartphones .................................................................................................................. 41

Big Data and AI ........................................................................................................................................ 41

Digital engagement ................................................................................................................................. 41

Connected devices .................................................................................................................................. 41

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Funding of digital health ventures ...........................................................................................42

Major themes ............................................................................................................................................42

Investment landscape ............................................................................................................................43

Exit tally ......................................................................................................................................................43

Pharma company involvement in digital health ............................................................44

Most pharmaceutical companies are involved in harnessing digital health technology .........45

Pharma’s level of commitment to digital health technology viewed as insufficient ..............46

There are many areas in which pharma can gain from technology developed by digital health companies .................................................................................................................. 47

Pharma–patient engagement could be disrupted if pharma fails to establish a foothold in certain digital health technologies .............................................................................48

Opportunities for pharma to act as venture capital investor and incubator in the digital health sector .....................................................................................................................48

Industry should act as an accelerator for transformation of healthcare through collaboration with digital health companies .....................................................................................50

Digital health innovation provides pharma with opportunities to develop a competitive advantage across the value chain ...................................................................................................... 51

Evangelists of digital health technology do not yet command significant influence ...........52

Clinical trials and ‘beyond the pill’ services are high growth areas ...........................................52

Barriers holding back the progress of digital innovation ......................................54

The role of technology giants’ venture capital arms .................................................56

Future trends that will propel the further adoption of digital health technology ..........................................................................................................59

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Research objectives and methodologyThis FirstWord Dossier report examines digital health innovation through the lens of startup companies that are driving expansion of the sector. The report profiles startup ventures that are reshaping healthcare and affecting conventional pharmaceutical company business models. It looks at the technology and the potential it has to drive significant improvements across the healthcare spectrum. Key research objectives were as follows:

nUncover insights that help pharma companies understand the technology and trends

nIdentify areas of opportunity and threat to drug manufacturers

nProvide inputs to help pharma companies formulate plans in response to changes in the market.

Meeting these objectives has been accomplished by providing information, analysis and insights in the following areas:

nProfiles of key digital health startups

nCurrent and future business models of digital health startups

nBarriers that may hinder the development and use of digital health technology

nPharma company involvement in digital health

nCurrent and future trends driving progress in digital health technology.

The research methodology comprised three main steps.

1. Detailed secondary research into digital health startup companies and investment in the digital health market

2. In-depth interviews with executives from digital health startup companies (n=6) and executives who have experience in and responsibility for the advancement of digital health at major pharma companies (n=4)

3. Collation and analysis of the information gleaned from the primary and secondary research.

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Key questions asked of the executives from digital health startups included:

1. To what extent will the technology developed by your company transform the delivery of healthcare?

2. Who will be the main beneficiaries of this transformation?

3. How will your business model evolve over the next five years?

4. What are the key milestones your startup needs to pass over the next five years?

5. To what extent does the success of your startup depend on collaboration between key stakeholders such as pharma, payers, physicians, patients, regulators and others?

6. Which other digital health startups do you admire and why?

7. What role should pharma’s venture capital arms be playing in funding startups and digital innovation generally?

8. What does pharma have to gain from your startup’s technology?

9. What does pharma stand to lose if your technology establishes a foothold in the prevention, treatment and management of disease?

10. Which pharma companies do you see playing a big role in digital health in the future and why?

The questions were tailored according to each startup’s specific area(s) of operation.

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Digital Health Startups Expert ContributorsThe following experts from digital health startup companies were interviewed.

nAdam Brickman: Director, Strategic Communications and Public Policy, Omada Health

nMarkus Christen: Head of Global Development, Proteus Digital Health

nAlberto Gandini: Chief Executive Officer (CEO), Accel Diagnostics

nDavid Howe: CEO, LuminaCare Solutions

nOliver Kharraz: CEO, Zocdoc

nBret Kinsella: Chief Marketing Officer, Kit Check

The report presents 10 profiles of digital health startups. Six of these profiles are based on insights obtained through in-depth interviews with executives from the companies and secondary research into their products, services, business models, key milestones and the impact they could have on the pharma industry. The remaining four profiles have been compiled using publically available information to provide background on the activities and ambitions of the companies.

A main criterion used for selecting startup companies to profile was the extent to which they may have an impact on pharmaceutical companies. Another requirement was to cover a range of startups that illustrate the diversity of digital health products and services on offer. Thus the companies selected reflect different categories of size, status of product, complexity of technology and customers served. The digital health startup companies profiled in this report are listed below:

Accel Diagnostics is developing point-of-need diagnostic tests

Kit Check has developed a medication tracking system used by hospitals

LuminaCare Solutions helps hospitals that need to reduce time spent finding the right treatment

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Omada Health aims to help people reduce their risk of developing serious chronic conditions like diabetes

Proteus Digital Health has developed technology that monitors drug adherence and other patient behaviour

Zocdoc is a patient platform providing services as part of a digital centre of care.

Four smaller profiles are provided on other startup ventures. They illustrate how digital health technologies are being used to create novel products and services to facilitate the delivery of healthcare:

Dexcom markets a mobile continuous glucose monitoring system

Fit4D provides solutions to pharma, payers and providers that promote medical adherence and improve health outcomes in diabetes patients

RxREVU offers a technology platform to healthcare providers aimed at improving prescription decisions and health outcomes and lowering drug costs

Tute Genomics analyses human genome data for genetic diagnoses.

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Funding of digital health venturesIn 2015, venture funding for digital health companies totalled $4.5 billion. From 2011–2015 it grew at a compound annual growth rate (CAGR) of 32 percent. In 2015 there were 302 venture funding deals involving 267 companies, inked at an average deal value of $14.8 million.15

Major themesIn 2015, the following six digital health subsectors received 50 percent of all funding:

nHealthcare consumer engagement

nPayer administration

nWearables and biosensors

nTelemedicine

nCare coordination

nPersonal health tools and tracking

Noticeable growth was seen in three areas in 2015 over 2014: personal health tools and tracking (223 percent); care coordination (152 percent); and life sciences technologies (49 percent).

15 Extracted from Rock Health, Digital Health Funding: 2015. Retrieved from https://rockhealth.com

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Barriers holding back the progress of digital innovationThe main barriers to the progress of digital health innovation are lack of reimbursement mechanisms for digital therapeutics and legal and regulatory restrictions. An additional barrier is the desire and need to use the data streams responsibly and to respect privacy. The uncertainty about the future structure of the healthcare industry also holds back the launch of some projects.

“I think there are a couple [of barriers to digital adoption]. The first one is that there is not an ecosystem set up to reimburse for it yet. If I could project that a digital therapeutic would launch and drive billions of dollars of revenue then I can guarantee that it would catalyse the interest of companies. But we have not seen that setup and we haven’t seen any examples. That’s certainly an issue.

“The other big barrier that I would be shocked if every executive would not mention is the legal regulatory framework, because we operate in such a tough environment. Progress in that area will certainly catalyse innovation.”

Director, Digital Health, large pharma

“The ever-present uncertainty of the healthcare landscape does not help. Even with the changing legislative and regulatory environment, there are positives and negatives. So that is certainly part of it [barriers to digital health]. Certainly governmental groups exist to protect patients; they exist to help make better decisions and help ensure that a patient participates in a safe and informed manner. But at the same time, it [legislation] can be overly restrictive or it can be difficult for companies to effectively share great information.

“There is a constant evolution in terms of how much protection is needed and how much information can be shared.”

Associate Director, Strategic Marketing – mid-sized pharmaceutical company

“Technically, I think a lot of things are in place. Understanding of how to manage, protect and secure data, and getting better at doing so, is evolving. In each case, firstly, we have to prove we can capture the data, and then secondly, we can capture

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Unique insight into current and future pharma market dynamics through quantitative surveys with physicians, providing essential data in major disease areas and on key industry issues .

Critical and unbiased intelligence derived from in-depth interviews with the world’s foremost thought leaders on the current and future treatment landscapes in major disease areas. Reports include three quarterly updates to ensure insights remain current.

Unbiased and concise analysis based on interviews with leading industry experts on important trends and challenging issues affecting the pharma industry today.

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July 2016 SAMPLE PAGES PAGES | SAMPLE Pages... · Unique insight into current and future pharma market dynamics through quantitative surveys with physicians, providing essential data