This document discusses the evolution of healthcare and opportunities in digital health. It notes that healthcare is transitioning from a data poor to data rich science due to genomics, data science, mobile devices, and personalized medicine. This represents a shift from herd to personalized medicine. The document also discusses the growth of digital health funding and deals, increasing traction through FDA approvals and partnerships, and outlines a portfolio of digital health investment opportunities.

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HEALTHCARE EVOLUTION:
WHAT IS DIFFERENT THIS TIME
DR VISHAL GULATI: HEALTHTECH VC, DRAPER ESPRIT

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Draper Esprit Facts

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Digital Health: What & Why
ATTRACTIVE STAGE OF SECTOR
• US market growing rapidly, EU market about
to takeoff
• Global application of technologies
• Attractive valuations – potential arbitrage
opportunities
DEFINITION: Products and platforms exploiting connectivity, data aggregation
and/or analytics to improve disease outcome and or patient experience
DIVERSE OPPORTUNITY LANDSCAPE
• Wide range of opportunities, portfolio opportunity
• B2C side expands later stage investor universe to
help value creation
• Surrounded by acquisitive industries
UNDERPINNED BY TECH CHANGES
• Rising global smartphone penetration
• Exponential tech bringing costs down (DNA
sequencing)
• Data analytics/security technologies maturing
FAVOURABLE MACRO-TRENDS
• Unaffordable healthcare costs
• Aging population
• Baby-boomers driven by quality of life & willing
to pay for better outcome and experiences

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Private and confidential draft for
discussion
952
1,431 1,465
2,355
5,172
5,744
160
292
415
626
737
889
0
100
200
300
400
500
600
700
800
900
1000
0
1000
2000
3000
4000
5000
6000
7000
2010 2011 2012 2013 2014 2015
Funding (USD mio) Deals (#)
In in less than 5 years, digital health has outstripped total investments in medical devices & diagnostics
Notable digital health investments (USD mio raised 1)Digital health funding
313
226
66
77
DealsFunding (USD mio)
18
25
26
9
(1) Rounded figures
Source: CB Insights, January 2016; CrunchBase
Digital Health: Venture Investing

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Digital Health: TRACTION
•$ 2.5b worth of M&A
in 2014 (av. $210m)
•Outperformed
biotech & device M&A
M&A
•8 venture backed IPOs
since 2009
•Include Veeva,
MediData but not all
have performed well
IPOs
•Guidance on major
issues
•27 digital health
products approved
FDA
•Guidance on data
protection since 2013
•Further guidance in
2015
EMEA
•Recongnised role of
software in disease
management
•Omada Health’s
diabetes software first
product
CDC
•Announced Digital
Health Roadmap in
2013. Pt. access in ’15
•Launched accelerator
& test-beds in 2015
NHS
•Leading US health
systems rapidly going
digital (Kaiser)
organically as well as
inorganically
Payers
•Major investments by
Qualcomm, Bluecross,
Google, Novartis
•Big data traction
(Biogen, Roche)
Corporates
•Apple Inc: HealthKit
(EPIC), ResearchKit
•Android
•IBM Watson: Apple,
J&J, Medtronic
Lateral

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Digital health – Matrix of deals
Technological Innovation
Business Model Innovation
B2BB2C
Telemedicine
Consumer Genetics
Neuro enhancement
“Tripadvisor”
Precision Medicine
Remote Pt. MonitoringWearables
Data Security
Workflow Tools
Premarket Access
Ecommerce Clinical Trial Recruitment
DTC Medical Device
Stratification & Triage
Data Generation
Training & Edu
Source: Internal
Online Tx

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Portfolio

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Portfolio Map:
Technological Innovation
Business Model Innovation
B2BB2C
Telemedicine
Consumer Genetics
Neuro enhancement
“Tripadvisor”
Precision Medicine
Remote Pt. MonitoringWearables
Data Security
Workflow Tools
Premarket Access
Ecommerce Clinical Trial Recruitment
DTC Medical Device
Stratification & Triage
Data Generation
Training & Edu
Source: Internal
Online Tx

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Life is Good 1.0

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Life is Good 2.O

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Not so Good: Death is Still Very Common

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So Where are We?
A B
C

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What is different now?
•Healthcare is changing from a data poor science to
a data rich science: Genomics, Data Science,
Handhelds, Personlised Medicine/ Precision
Medicine
•Culture Shift: Privacy, Democratisation,
Accountability, End of exceptionalism

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Technology change….

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Getting Rich…

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Culture Shift: “Public Health”
"You changed my 11-year-old
daughter's summer! She's been so
self-conscious, but since she read
about you and saw this photo, she
cannot wait to wear a bathing suit
tomorrow and show off her insulin
[pump] and have me post a photo
here!"
Miss Idaho Sierra Sandison

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Patients don’t want to share data. Seriously?

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Culture Shift: Participatory Medicine

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Powershifting

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Data Driven Accountability
Day of week of procedure and 30 day mortality for elective surgery: retrospective analysis of hospital episode statistics.
BMJ 2013; 346 doi: http://dx.doi.org/10.1136/bmj.f2424 (Published 28 May 2013)

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Which is more important?

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1: Volume to Value
Activity Based Payments Value Based Payments
Birth of the analytics for accountability industry

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2: Herd Medicine to Nerd Medicine
One size fits ‘all’ n = ~1
Genomics & other stratification tools become mainstream

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3: Small is the new Big
Mainframe Handheld
Adding a billion new healthcare consumers

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4: ER to CR
Episodic Care Continuous Care
Strong disruptive interactions between industries

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The Digital Health Opportunity
THE FUTURE OF HEALTH WILL ARISE FROM THE JOINT ENERTPRISE OF
PATIENTS AND HEALTH PROFESSIONALS USING DIGITAL TECHNOLOGIES
AND HARNESSING LARGE POOLS OF DATA
BIG DATA GENOMICS CONNECTIVITY A.I.

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• vg@healthtech.vc

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• vg@healthtech.vc