In conversations with entrepreneurs starting or running companies in the women’s health space, I’ve heard a few of the same major challenges echoed: there’s not enough research, not enough education/awareness and not enough funding.
A new report from research firm Frost & Sullivan proposes that collaboration between public and private sectors is a critical factor in spurring investment and bringing new innovations in menstruation, contraception, maternal health, child birth, menopause and breast cancer to market.
While some researchers say public funding has been lackluster over the last several decades, the National Institutes of Health and numerous hospitals and universities have divisions devoted to funding women’s health research projects. But are investors meeting them halfway?
“Startups in women’s health face many hurdles such as sustaining innovation due to the low amount of VC money being pumped in,” said industry analyst Saju John Mathew, the lead author of Emerging Technologies for Women’s Health — Evaluation of Funding Prospects. “The dearth of evidence-based clinical trials also tends to discourage VC investments.”
To my knowledge, there have been few recent exits for companies focused on women’s health — maybe the most obvious being diagnostic test maker Genomic Health (NASDAQ:GHDX), which went public in 2005. Mathew noted that much of the private funding that has been invested in women’s health has gone to companies focused on breast cancer, in the way of drugs, device treatments and diagnostic techniques.
But the climate for investing, as well as the continuing unmet needs in the market and the potential for collaborations with mobile and wireless patient-monitoring technologies, might be changing that.
“Most of the companies that are actively taking up research in women’s health such as menstruation, contraception and so on have a tentative commercialization date in the next five to six years,” Mathew said. “VCs are increasingly understanding that if they have to invest in companies catering to women’s health, they have to look at providing long-term capital.”
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
The last year has seen more than a handful of big investments in treatments for women’s health issues aside from breast cancer. A California device company, for example, raised $20 million for its endometrial ablation system to treat heavy menstrual bleeding. Boston-based OvaScience also raised $38 million to continue developing infertility treatments.
Meanwhile, venture-backed company OmniGuide also forayed into gynecology with its laser surgical tools. And Teva Pharmaceuticals has talked publicly about plans to boost work in women’s health beyond fertility issues, with CEO Jeremy Levin saying that “no one has taken leadership“ in the sector.
Diagnostic startups have also been getting some investor attention. Among those getting funded in the last year are VitaPath Genetics, a venture-backed company with diagnostics for infants at risk of birth defects; Juneau Bioscience, developer of a DNA-based test for endometriosis; and Celmatix, which closed a $1.5 million series A led by Topspin Partners for its molecular diagnostic product to assess female fertility.
The fact that health companies have increasingly turned to emerging markets outside of the U.S. also bodes well for the women’s health market as there are huge unmet needs in maternal health and HIV/AIDS outside of the U.S. This is where the best examples of the public/private partnerships Frost & Sullivan refers to are seen. For example, a global vaccine group is funding cervical cancer immunization projects in Africa and Asia using HPV vaccines from Merck and GlaxoSmithKline.
“VCs are also sprouting in developing economies with good money muscle, a case in point being China,” Mathew said. “Another region showing growth in funding for women’s health is the Middle East.”
