Medical innovation has been a significant focus for venture capital investment over the last ten years. A growing, aging population combined with the opportunity to come up with global solutions is driving an increase in change that will help people better manage their well -being or enable them to heal sooner.
Traditional innovation in pharmaceuticals is now augmented by advances in medical technology. The medical device industry is predicted to be worth more than $ 8.5 billion by 2025 but ensures that the industry’s success will depend on investment from venture capital firms and other investment vehicles.
One company that is well established within the world of private equity investment technology is Juno Capital. One of its partners and co-founder, Edward Rudd, outlines his experience investing in medical technology companies (MedTech), the advantages of platform technologies for an investor and the importance of data driving analytics positive health care outcomes…
Founded in 2011, Juno Capital is an innovative asset management company that provides wealthy individuals and families with attractive and engaging investment opportunities that offer a variety of risk profiles. . One of the company’s main objectives is to introduce private investors to the early stages of technology companies, helping them decide whether to participate in investment rounds in these companies and offering the opportunity to develop diverse and engaging investment portfolio.
One of Juno’s most important criteria for investment is that companies have established themselves within a specific market through their technology, product or service, but need additional capital to accelerate growth and build their business. achievements. One such company is Sky Medical Technology, which has taken a technology called “On Pulse” and made it a wearable medical device that addresses medical issues.
Ed Rudd was first introduced to Sky Medical Technology when he was a partner with his former investment company, Longbow Capital LLP, a specialized healthcare investment firm where he was responsible for acquiring and researching new opportunities.
“I led the deal for Longbow to invest in Sky Medical Technology in 2009,” he comments. When he and his fellow founding partner Julian Hickman left Longbow to set up Juno Capital, he decided to stay with the company Sky Medical Technology. “It’s one of those companies that I want to continue to have a relationship with,” Ed added. “And now, I believe we’ve invested more in Sky since we left Longbow than we did when we were there.”
One of the first challenges for Sky is to take a solid and proven technology and make it a product. The result – the geko ™ device, is a wearable medical gadget that helps in addressing many medical ailments. The device, applied to the knee, works by sending electric pulses to the lower leg that increase blood circulation. It is an intuitive, yet proprietary, mechanism of action, well protected by a family of patents, that can be applied to separate areas of therapy- meaning each area of therapy only requires data. studies and positive economic data to be embedded in clinical practice.
Ed is attracted to product creativity. “It’s a simple product. I used to invest in medical heart pumps and it’s incredibly complex devices. I liked the idea that, with the geko ™ device, you use the body’s own healing mechanisms. “You usually give the body ways to heal itself.”
A Platform for Technology
From the outset, Ed believed that the geko ™ device had the potential to be “a platform technology, rather than a simple single-application technology”. The device can be applied to complications related to inflammation after surgery, the closure of wounds that are difficult to heal and the prevention of swollen living blood clots. The scope of applications is a significant driver for Juno to invest. “It obviously worked. The evidence and data, even in the early days, was uncertain. And it seemed like a straight path to regulation and from there to deliver the product to market.”
This provided potential new ways to utilize and resulted in increased investment from Juno. As Ed said, “our interest in the company has expanded as the opportunity offered by the geko ™ device has grown.”
Applications for the geko ™ device are associated with a hospital environment where patients are immobile, such as those in intensive care or recovering from an operation – and are therefore at higher risk of blood clots. , or require post-operative or trauma-based edema management. The device can also be applied to wound healing in the community for patients who are supported by medical staff or overseeing their own health care.
For Juno, the benefits of the platform technologies are significant. “It offers a portfolio approach. If you’re having a hard time gaining traction in an application, you have many other opportunities to grow potential uses for the device. For an investor that means a lot of potential investors future or technology or company acquisitions. “
Juno Capital has also invested in Destiny Pharma, a company with similar opportunities. Ed described the company as “a drug development business that has developed a portfolio of anti-infective.” These drugs work against MRSA but offer many other uses.
“Our main product is for“ decolonization of the nose. ”If you go to the hospital for an operation and you catch a bacterial infection, the chances are very high that you will catch the infection from yourself because many people carry staphylococcus. aureus in their nostrils and the trauma of an operation and its effect on the body’s immune system The system can lead to an infection.If you can remove the bacteria before people go to the theater, patients are more likely will get infected. Fewer infections mean shorter stays and faster recovery, all of which reduce costs and improve efficiency within a healthcare system. “
Ed is honest enough to admit the challenge associated with platform technology – maintaining a sharp focus when faced with multiple opportunities. “You need to focus on gathering evidence to ensure regulatory approval in one area before moving on to the next, rather than focusing on all clinical applications at once. Sky Medical has done that a great job of prioritizing different applications according to methodology and evidence and it helped prioritize opportunities.Finally, it offers companies the opportunity to license the technology for one of the application. Critical promotes credibility and builds a solid evidence base, both from a clinical and economic perspective. “
MedTech – An Investment for More Reward Returns
Ed is keen to point out MedTech’s longer term natural investment. A typical technology investor can view success over a five year period. Investing in MedTech could take longer. “If you can navigate the regulatory requirement and clinical hurdles, assuming you have the right kind of products and a solid market, trading and licensing MedTech can be really less risky. It can be. you choose to find a clinical partner or trade your own. ”In traditional technology,“ commercialization can easily go unnoticed as a risk. Implementing a good strategy to trade in a very competitive market can be difficult. Platform-based medical devices offer an investor a unique opportunity.
Ed believes that the founder and CEO of Sky Medical Technology, Bernard Ross, and his team, have developed an approach to understanding risk-reward profile shifting. “Recognizing that the company needs to spend money proving that the device delivers a positive medical outcome, the geko ™ device has received regulatory approval in the UK and US. This means that the opportunity is less risky for licensees. Licensors only need to address commercial risk not regulatory risk. “
“If you have the right kind of clinical and economic data, it’s almost impossible for hospitals and clinics not to take your product seriously. It becomes risky if you don’t use it.”
MedTech – Driving Data for Better Medical Results
Ed believes MedTech devices play an important role in the future of healthcare. “There’s a new revolution in healthcare technology and it’s data -driven,” he commented. “MedTech devices can incorporate data collection to help ensure a continuous improvement in outcomes.” Imagine a connected version of the geko ™ device. It can provide feedback on whether the device is turned on, positioned correctly and its effect on blood flow.
This will help provide a community nurse, for example, with data on which patients are using the device correctly, allowing them to focus on those in need. This may mean time can be spent where it is needed, rather than seeing patients who do not need support. This data can also provide insight to patients, helping them make the road to recovery easier, as well as offering an overview of health systems in the most efficient and effective devices. of MedTech for specific ailments. “
As innovation provides smarter solutions to medical issues, so do the demands on health systems. Ed believes MedTech’s innovation could help bridge between the growing health care demands of an aging population and the limited budget available for treatments. “MedTech’s innovation, specifically the platform technology that addresses many medical issues has the potential to provide cost -effective ways to deliver improved clinical outcomes. This is great news for patients and investors and one of the reasons we are excited about the opportunities this industry has to offer. ”