Maria Shepherd, President and Founder, Medi-Vantage02.07.22
Money, money, money! There have been some amazing acquisitions of digital health companies in the past year. While digital health companies raised significant money in 2021, the question is, “How can we learn from this?”
Digital health funding reached a new pinnacle in 2021. In the Rock Health 21Q3 report, it was reported investment climbed to $21.3 billion in 541 deals and average funding for Series A, B, and C rounds more than doubled since 2017 (Figures 1 and 2). The average deal in the first three quarters of 2021 was an impressive $39.4 million.1
Why This Is Important
Are we experiencing a digital health bubble or another record-breaking year? The years 2017-2019 averaged $7.6 billion per year of venture funding in digital health and in 2020, investment popped to 14.6 billion.¹ Last year (2021) exceeded all those benchmarks through the third quarter, reaching more than $21 billion.1 Again, the question is, “What can we learn from this?”
According to the Rock Health report,¹ the digital health companies determined as most attractive for investments were:
It is not a pretty picture. By 2032, the AAMC predicts the United States will need approximately an additional 46,900 to 121,900 physicians, which includes both primary care and specialists. Surgery will be hard hit, with an extra estimated 14,300 to 23,400 surgeons needed by the same time and almost double that for other specialties such as radiologists and pathologists. Further, age is a significant factor as well; the AAMC reminds us one-third of all physicians currently practicing will be older than 65 by 2032.2
Help is on the way, however, in the form of nurse practitioners, physician assistants, and specialized registered nurses whose numbers are expected to increase. Further research is required on the types of services they will be providing, and if (or at what point) the supply of these types of healthcare professionals will become saturated.2
The takeaway for medtech? Broaden the use of the device to as many of these different types of healthcare providers as possible. For example, one of my clients is developing a new device used during the delivery of babies. A critical success factor will be if the physician must insert the probe or if a nurse can perform the task. The dynamics of labor & delivery are changing rapidly, and the broader the approved use of the device, the more often it can be adopted and utilized.
Augment/Improve the Treatment of Disease
One example of digital health augmenting the treatment of disease comes from the recently acquired Gauss Surgical, a digital health medtech that developed Triton (an AI-enabled platform for real-time monitoring of blood loss during surgery3). Triton’s value proposition is it enhances patient care during surgery by recognizing hemorrhage, allowing the surgical team to intervene earlier to reduce or stop blood loss.
Estimating and quantifying blood loss has been an unmet need throughout the history of surgery. One of Triton’s earliest applications has been in Labor & Delivery. Reports indicate as many as 5 percent of newly delivered mothers can suffer a post-partum hemorrhage,4,5 which is the leading cause of death for new mothers around the world.6,7
Another example is AppliedVR—a startup in the immersive therapeutics space. In 2020, the company was awarded breakthrough device designation for the EaseVRx. Then, in November 2021, the company announced it gained de novo approval from the FDA for the technology to treat chronic lower back pain.8 That same month, AppliedVR declared it had finalized its $36 million series B funding round. The pain relief space is a huge unmet need and AppliedVR was the first to receive FDA de novo approval for a pain indication.
Patients use EaseVRx (a prescribed medical device with software on a proprietary hardware platform) at home. The system provides pain management training using cognitive behavioral skills in an immersive virtual reality headset that combines biopsychosocial pain education, diaphragmatic breathing training, mindfulness exercises, relaxation-response exercises, and executive functioning games. In a clinical trial, patient outcomes were significant. The data showed a 42 percent drop in pain intensity; a 49 percent decrease in activity interference; a 52 percent decline in sleep interference; a 56 percent reduction in mood interference; and a 57 percent drop in stress interference.8
Human factors usability is important to patients, providers, and payers. Each stakeholder must be confident that using a digital therapeutic will provide positive outcomes. In a clinical study, EaseVRx participants showed high engagement with an average full use of 5.4 sessions per week and patient satisfaction was judged by the System Usability Scale9—a common usability scale used in assessing usability in medical devices.
The third example is the Elvie Breast Pump. All breast-feeding mothers will appreciate the features this pump offers. It is a wearable electric breast pump worn inside the bra. It is silent (no embarrassing suction noises while expressing milk in public places). The device is managed through a smartphone to provide a wire-free, hands-free experience. Through the app, breast-feeding mothers can control the pump, measure milk volume in real-time, track their pumping history, and access breast pumping tips. Further, one size does not fit all with the Elvie pump, because the mother can personalize it by opting for different intensity settings.10
The time spent getting set up to pump is no longer wasted. My sister, a flight attendant, previously had to use the airplane lavatory to pump in private. Now, Elvie promises “wire-free, hands-free, and hassle-free.”10 It is easy to wash, assembly is intuitive, and it automatically changes from Stimulation into Expression mode when there is a reduction in milk. Elvie will automatically stop when full.
Deal Volume in 2021
Is there any wonder why deal volume surged in 2021? With all these great devices, enhanced by the benefits of digital health, augmented reality, virtual reality, artificial intelligence, and machine learning, why not invest in the benefits?
The Medi-Vantage Perspective
Consider these applications and peer into the future for your device’s next generation. Voice of the customer can help your design team assess what patients, payers, physicians, and providers all need to make your device leapfrog the competition and grab medical device market share.
References
Maria Shepherd has more than 20 years of experience in medical device/life-science marketing in small startups and top-tier companies. After her industry career, she founded Medi-Vantage, which provides marketing and business strategy and innovation research for the medical device industry. Shepherd has taught marketing and product development courses and can be reached at mshepherd@medi-vantage.com. Visit her website at www.medi-vantage.com.
Digital health funding reached a new pinnacle in 2021. In the Rock Health 21Q3 report, it was reported investment climbed to $21.3 billion in 541 deals and average funding for Series A, B, and C rounds more than doubled since 2017 (Figures 1 and 2). The average deal in the first three quarters of 2021 was an impressive $39.4 million.1
Why This Is Important
Are we experiencing a digital health bubble or another record-breaking year? The years 2017-2019 averaged $7.6 billion per year of venture funding in digital health and in 2020, investment popped to 14.6 billion.¹ Last year (2021) exceeded all those benchmarks through the third quarter, reaching more than $21 billion.1 Again, the question is, “What can we learn from this?”
According to the Rock Health report,¹ the digital health companies determined as most attractive for investments were:
- Software developed to accelerate R&D
- Delivery of on-demand healthcare services
- Augment the treatment of disease
It is not a pretty picture. By 2032, the AAMC predicts the United States will need approximately an additional 46,900 to 121,900 physicians, which includes both primary care and specialists. Surgery will be hard hit, with an extra estimated 14,300 to 23,400 surgeons needed by the same time and almost double that for other specialties such as radiologists and pathologists. Further, age is a significant factor as well; the AAMC reminds us one-third of all physicians currently practicing will be older than 65 by 2032.2
Help is on the way, however, in the form of nurse practitioners, physician assistants, and specialized registered nurses whose numbers are expected to increase. Further research is required on the types of services they will be providing, and if (or at what point) the supply of these types of healthcare professionals will become saturated.2
The takeaway for medtech? Broaden the use of the device to as many of these different types of healthcare providers as possible. For example, one of my clients is developing a new device used during the delivery of babies. A critical success factor will be if the physician must insert the probe or if a nurse can perform the task. The dynamics of labor & delivery are changing rapidly, and the broader the approved use of the device, the more often it can be adopted and utilized.
Augment/Improve the Treatment of Disease
One example of digital health augmenting the treatment of disease comes from the recently acquired Gauss Surgical, a digital health medtech that developed Triton (an AI-enabled platform for real-time monitoring of blood loss during surgery3). Triton’s value proposition is it enhances patient care during surgery by recognizing hemorrhage, allowing the surgical team to intervene earlier to reduce or stop blood loss.
Estimating and quantifying blood loss has been an unmet need throughout the history of surgery. One of Triton’s earliest applications has been in Labor & Delivery. Reports indicate as many as 5 percent of newly delivered mothers can suffer a post-partum hemorrhage,4,5 which is the leading cause of death for new mothers around the world.6,7
Another example is AppliedVR—a startup in the immersive therapeutics space. In 2020, the company was awarded breakthrough device designation for the EaseVRx. Then, in November 2021, the company announced it gained de novo approval from the FDA for the technology to treat chronic lower back pain.8 That same month, AppliedVR declared it had finalized its $36 million series B funding round. The pain relief space is a huge unmet need and AppliedVR was the first to receive FDA de novo approval for a pain indication.
Patients use EaseVRx (a prescribed medical device with software on a proprietary hardware platform) at home. The system provides pain management training using cognitive behavioral skills in an immersive virtual reality headset that combines biopsychosocial pain education, diaphragmatic breathing training, mindfulness exercises, relaxation-response exercises, and executive functioning games. In a clinical trial, patient outcomes were significant. The data showed a 42 percent drop in pain intensity; a 49 percent decrease in activity interference; a 52 percent decline in sleep interference; a 56 percent reduction in mood interference; and a 57 percent drop in stress interference.8
Human factors usability is important to patients, providers, and payers. Each stakeholder must be confident that using a digital therapeutic will provide positive outcomes. In a clinical study, EaseVRx participants showed high engagement with an average full use of 5.4 sessions per week and patient satisfaction was judged by the System Usability Scale9—a common usability scale used in assessing usability in medical devices.
The third example is the Elvie Breast Pump. All breast-feeding mothers will appreciate the features this pump offers. It is a wearable electric breast pump worn inside the bra. It is silent (no embarrassing suction noises while expressing milk in public places). The device is managed through a smartphone to provide a wire-free, hands-free experience. Through the app, breast-feeding mothers can control the pump, measure milk volume in real-time, track their pumping history, and access breast pumping tips. Further, one size does not fit all with the Elvie pump, because the mother can personalize it by opting for different intensity settings.10
The time spent getting set up to pump is no longer wasted. My sister, a flight attendant, previously had to use the airplane lavatory to pump in private. Now, Elvie promises “wire-free, hands-free, and hassle-free.”10 It is easy to wash, assembly is intuitive, and it automatically changes from Stimulation into Expression mode when there is a reduction in milk. Elvie will automatically stop when full.
Deal Volume in 2021
Is there any wonder why deal volume surged in 2021? With all these great devices, enhanced by the benefits of digital health, augmented reality, virtual reality, artificial intelligence, and machine learning, why not invest in the benefits?
The Medi-Vantage Perspective
Consider these applications and peer into the future for your device’s next generation. Voice of the customer can help your design team assess what patients, payers, physicians, and providers all need to make your device leapfrog the competition and grab medical device market share.
References
- bit.ly/mpo220101
- bit.ly/mpo220102
- bit.ly/mpo220103
- bit.ly/mpo220104
- bit.ly/mpo220105
- bit.ly/mpo220106
- bit.ly/mpo220107
- bit.ly/mpo220108
- bit.ly/mpo220109
- bit.ly/mpo220110
Maria Shepherd has more than 20 years of experience in medical device/life-science marketing in small startups and top-tier companies. After her industry career, she founded Medi-Vantage, which provides marketing and business strategy and innovation research for the medical device industry. Shepherd has taught marketing and product development courses and can be reached at mshepherd@medi-vantage.com. Visit her website at www.medi-vantage.com.