Investments in electronic health records, tools to help hospitals absorb physician practices and a group working with hospital systems to help them set up their own insurance plans. Those three health IT companies helped drive venture capital investment in the software sector, which hit a 12-year high in the third quarter. Medical device and biotechnology companies collectively marked their lowest investment for a nine month period since 2005, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association. It is based on data from Thomson Reuters.
About $3.6 billion was invested in the software sector and there were 42o deals in the quarter.
Mark McCaffrey, global technology partner and software leader at PwC US said “The continued increase in valuations for innovative and disruptive technologies in software-related companies, coupled with the increase in exit activity, is driving venture capitalists to make more investments in this space.”
Here were the biggest health IT deals for the quarter based on data from the MoneyTree Report and Mercom Capital Group’s Healthcare IT report.
Evolent Health raised $100 million. EHR provider Practice Fusion raised $70 million. MedSynergies, a group that is well-positioned to respond to the trend of hospitals acquiring physician practices raised $65 million. Fitness tracking business Fitbit raised $43 million and counted Qualcomm Ventures and SAP Ventures among its new investors. Startup health insurer Oscar is combining telemedicine with health insurance, in an approach intended to personalize care, raised $40 million.
In the past nine months life science investors backed 541 deals, as they remained picky about their investment decisions, favoring drugs in later stages of development, which are relatively derisked.
In biotech there were 123 deals, a 10 percent rise over the previous quarter but the $852 million behind those deals was a 39 percent decline over the second quarter. The medical device industry experienced the opposite effect — more money $566 million went into fewer deals fewer deals — received the third largest investment total — 65.
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.
Here were the top five biotech deals in the third quarter according to Fierce Biotech:
1. Discerna Pharmaceuticals in Watertown, Massachusetts raised $60 million towards development of its compound to treat Hepatocellular Carcinoma, the most common form of primary liver cancer. Its therapeutic uses an RNA interface as part of its drug delivery. The condition is one of the leading causes of death with 695,000 deaths annually.
2. Otonomy raised $45.9 million for pivotal studies of its intratympanic steroids to treat symptoms of Ménière’s disease, particularly vertigo.
3. Intra-Cellular Therapies raised $43 million to fund a Phase 2 clinical trial to treat schizophrenia. Its drug combines 5-HT2A — serotonin receptors — with dopamine receptor phosphoprotein modulation and serotonin reuptake inhibition — which acts like an antidepressant.
4. Ophthotech Corp. raised $33.3 million for its treatment for wet age-related macular degeneration. It has initiated a pivotal Phase 3 clinical program to evaluate the safety and efficacy of its drug Fovista.chronic eye disease that causes vision loss in the center of your field of vision. Wet age-related macular degeneration is a variation of age related macular degeneration caused when blood vessels leak fluid or blood into the region of the macula, which is in the center of the retina. An estimated 1.8 million Americans aged 40 years and older are affected by AMD, according to the Centers for Disease Control.
5.(tied) iPierian raised $30 million in a Series A round to launch a spin-out company, True North Therapeutics. iPierian has two monoclonal antibody research and development programs each produced a lead antibody drug for distinct therapeutic areas. One targets the Tau protein for the treatment of Alzheimer’s disease and True North will focus on treating rare diseases in the hematologic, renal and neurological therapeutic areas.
5. (tied) Audentes Therapeutics raised $30 million for its therapeutic which uses gene therapy to treat Pompe disease, a rare, inherited disease inherited and often fatal disorder that disables the heart and skeletal muscles, according to data from the National Institutes of Health.
