Artiman keeps its eyes on Digital Health

December 9, 2015 ctheodoropulos

The digital health and diagnostics subsectors of the biotech industry are the sectors to watch in the coming year. Both areas are ripe for rapid growth, as the intersection of myriad technologies makes them increasingly valuable for both providers and patients. Many of the pioneering companies and key opinion leaders in this field will be on display at the Biotech Showcase™ event’s focused one-day Digital Health Showcase program on January 13.

Digital Health: Ready for investment

Digital health is marrying consumer technologies and time frames to medical information, providing instantly usable information for patients and physicians. In the process, it is transforming patients into healthcare consumers.

That distinction is important. For digital health to succeed, “the tools for wellness need to be brought to the people,” said Ajit Singh, PhD, partner in the early-stage venture company Artiman Ventures. “People won’t go to a doctor or hospital for wellness. They’ll go for sickness. Therefore, they need the ability to measure biometrics at home to help them change their lifestyles.”

Ajit Singh, Artiman Ventures

Ajit Singh, Artiman Ventures

It’s important for digital health solutions to measure an individual’s health trends rather than just point-in-time data. “Imagine if there was a way to measure 100 biometric parameters each morning that was integrated transparently into one’s normal, daily routine. A device would take the measurements, perform some calculations and then send a message encouraging you to take specific steps” like reduce sugar intake by 20 percent.

To that point, Artiman Ventures recently invested in a company—still operating in stealth mode—that is developing a device to monitor biometric parameters from saliva, urine, etc., to measure trends in a wide range of biomarkers. At this point, the challenges are the same as for any startup company—navigating the regulatory environment, developing the technology and obtaining capital.

The challenges specific to digital health technologies, Singh said, come after launch. As an example, he points to the adoption patterns of earlier technologies. Previously, physicians expected labs to deliver patients’ blood work in two to three days, and patients expected to have those results within a week. As digital health capabilities increase, however, patients will expect immediate results. “At that point, there are higher expectations. Patients are becoming consumers,” Singh said.

Putting this information in patients’ hands makes physicians’ work easier, Singh maintained. “Today, patients are Google-informed. But, if their knowledge of their health status is more focused, more personalized to their specific health state, and is sent securely to their physicians, they not only have more accurate information, but the doctor knows what they know so the consult can become more efficient.”

Managing this deluge of data and delivering actionable information in near real time requires digital health technologies to develop their backend capabilities, he said. Data isn’t useful unless it’s used.

Singh said the opportunities for digital health technologies are universal. “In emerging markets there aren’t enough doctors and nurses and they aren’t in the right places,” Singh said. Most are in cities, leaving rural and sometimes suburban areas underserved. That’s true in the US, too, he added.

The possibilities go beyond collecting fitness band-type information to technology that enables digital examinations and consults. “Now, digital health technologies can connect available capacity with demand,” Singh said. He envisions an “Uber-like” model for healthcare in which physicians with a free hour can connect virtually with patients needing care.

Diagnostics: A core focus

“Diagnostics composes only three percent of healthcare expenses, but impacts 75 percent of downstream expenses and 100 percent of outcomes. There’s no such impact in any other industry,” Singh said.

For that reason Artiman is heavily focused on diagnostics, including molecular diagnostics and proteomic expression technologies. It has invested in CardioDx, OncoStem Diagnostics, CellMax Life and Click Diagnostics, among others. “Each is highly disruptive,” he said.

Continued growth likely

Dr. Singh is loath to predict exactly how he expects the healthcare industry to change, but he says Artiman does expect the healthcare sector—including biotechnology—to grow as a percentage of the economy.

“The number of unsolved problems in healthcare are high. Healthcare costs are unsustainable, and there are regulatory hurdles and limited access to talent and capital,” Singh said. But there are opportunities, too. Chronic illnesses, orphan diseases, and diseases of wealth or lifestyle have their solutions in the biotech industry. “The future is positive,” he concurred.

Successfully harnessing that positive environment, he said, depends upon a company’s ability and willingness to adapt to that change.

That includes the willingness to give up well-thought-out plans to adapt to new opportunities. For example, Singh said, “a company may have anticipated FDA approval and a US launch, but changes in the regulatory climate, government initiatives, epidemics, opportunities for early trials or early monetization elsewhere may make it more feasible to launch elsewhere. Be prepared to adapt and harness those opportunities.”

Transformation is multidisciplinary and cross-cultural

“The changes transforming the world today are highly multidisciplinary in nature,” Singh said. The integration of technologies from unrelated markets is creating something greater than either created alone.

The international market also is speeding that transformation. “The US used to account for half the global healthcare market. Now it’s, at best, 20 to 25 percent,” Singh said. “Therefore, for small companies to scale, they must look abroad. It’s essential.”

The impetus to think internationally extends to talent and financing as well as markets. “Cellworks, incorporated in California, for example, has nearly 200 PhDs working in cell biology in Bangalore. You can’t find 200 PhDs in that field anywhere!” he exclaimed.

Capital considerations

The IPO window is open now, but small changes in an economy somewhere could affect the global economy. Consequently, he said, “it’s hard to speculate about IPO opportunities. The IPO window could close without warning. It literally could close tomorrow! So, companies need enough money to harness opportunities.”

Singh advised companies to hold some capital in reserve. “There’s never enough money in the startup world,” he admitted, but having the reserves to execute and to adapt is vital for long-term survival.

As he pointed out, the number of potential funding sources has increased during the past few years. In addition to venture capital and private equity, there also is sovereign money and investment from high net worth individuals available in the Middle East, India and China for US companies, as well as strategic investments from big pharma.

Recent changes in the US also add non-accredited investors to the pool of potential investors for small businesses and startups. “This will certainly increase access to money, but those investors may not have the appetite for risk,” Singh cautioned. “The industry needs more seasoned investors.”

Singh encourages companies to consider venture capital early. “We look at companies in the early stages of development,” he pointed out. “That’s a high-risk environment in which the technology hasn’t been derisked and the regulatory environment itself may still be in development. That’s when a classic venture model makes sense.”

Artiman Ventures is very involved in helping its companies throughout their development, from early white boarding and locating university technology to helping develop sales and marketing resources, Singh said.

Building a company is different than building a feature of product, he said. “A company has to scale. It has to build a supply chain, sales force, distribution channels, revenue stream, and many other elements. A lot goes into it.”

Artiman Ventures has more than USD 1 billion under management. That helps ensure it has the funds for the long-term commitment needed to help each of its company grow. The goal is to build companies, not just products.

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