2017’s transition in digital health funding: is it maturity or a reconsideration?

Rock Health’s topline for 2017 digital health funding is impressively upbeat, casting it as “the end of the beginning in digital health, the start of a new era with new challenges”. Digging into it, there is a continued slowing that Rock Health itself predicted back in their 3rd Quarter report [TTA 3 Oct 17]. It seems that the big did get bigger, but if you weren’t on the train in 2016 or prior, 2017 wasn’t the year you left the station. Their findings bear this out, keeping in mind that their tracking is for US companies with deals over $2 million in value, which excludes much of the action from young and international companies:

  • No digital health IPOs this year, in a weak year in general for IPOs
  • For the companies already in public markets, they outperformed the S&P 500 31 percent to 19 percent
  • Average deals hit an all-time high of $16.7M ($5.8 bn over 345 deals) 
  • Big money went to better-developed, more mature companies like Outcome Health and Peloton exercise equipment at $500 million and $325 million. Rock Health duly notes Outcome Health’s troubles since. (To this Editor, Peloton is not a digital health company despite its glitzy overlay of video and exercise community.)  
  • Seven $100 million + mega-deals front-loaded in the first half of the year. Second half’s sole big deal was genetic testing and data marketer 23andme. The dominant category of business? Consumer health information represented by Outcome, 23andme, PatientPoint, PatientsLikeMe, and ShareCare, most with a B2B2C model.
  • Looking at deals by stage, not surprisingly the funding at D and later rounds soared to an average size of $74 million (from 2016’s $46 million). Seed and A rounds’ average funding at $7 million, while the majority, hasn’t varied much since 2011. Series B funding was also flat at $17 million on average.
  • Exits continued to be weak, indicating the reality of healthcare investing being long haul. M&A deals declined for the second straight year to 119–18 percent fewer than 2016 and 36 percent fewer than 2015

Also Modern Healthcare.

This Editor’s opinion? One damper on 2017 was the $900 million credulously blown on Theranos. Call it the Theranos Effect.

As usual we will look at StartUp Health‘s always numerically bigger report after release, but this Editor’s bet is that it won’t be ‘crazy’ like earlier in 2017. 

Concussion diagnostics a hot area

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2014/05/Cerora-Simon.jpg” thumb_width=”150″ /]Diagnosing concussive and sub-concussive head blows both in sports and on the battlefield have been challenging, and your Editors have chronicled several approaches. One of the 2014 graduates of NYCEDC’s ELabNYC was Oculogica; their EyeBox CNS records three key eye movements in a 4 1/2 minute test to determine whether they fit a normal box pattern, with subsequent exams determining rate of brain recovery [TTA 17 Apr]. (We’ll be seeing more of Oculogica at NYC MedTech 13 May, along with MC10 which helped to develop the Checklight impact indicating skullcap with Reebok, seen at last November’s CES preview [TTA 15 Nov 13] and winning CES’ 2014 Design & Engineering award.) Now out of Bethlehem, Pennsylvania is Cerora’s MindReader, developed out of Lehigh University, Ben Franklin Technology Partners of NE Pennsylvania and in the first StartUp Health Academy/GE Entrepreneurship class. It is a wireless dry contact EEG reader which combined with other biosensor data and clinical observation aids speedy diagnosis. The reader is worn either on Google Glass or a headset (pictured above left on CEO Adam J. Simon, PhD). It’s in early days and still in testing; the baselines alone will need data from at minimum tens of thousands of subjects beyond the current testing on Lehigh U. athletes. Dr. Simon is also projecting use for sub-concussion injury, Alzheimer’s, PTSD and other neuropsychiatric disorders. Lehigh Valley Live, release on presentation at the American Academy of Neurology Annual meeting 30 April, WFMZ Ch. 69 News (video)