It’s more than just the drug. Venture capitalists aren’t only interested in the product anymore — they’re looking beyond the pill at what services and value it can offer.
During a breakout session at MedCity INVEST in Chicago, four expert panelists touched on this very topic.
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“We’re looking at new businesses to address big market opportunities,” said Renee Compton Ryan, vice president of venture investments at Johnson & Johnson Innovation.
Lisa Shafer, senior director of new devices and bioelectronic technologies for Teva Pharmaceuticals, said her company is taking a closer look at targeted drug delivery. “How do we get those drugs to the location they’re needed?” she asked.
In today’s world, technology also fits into the rubric of looking past the pill and product. For Dirk Schapeler, Bayer’s vice president of digital innovation for the United States, the tech piece comes in two forms. The first is using it to reduce the amount of time it takes to research a drug. “The R&D phase is very important to us,” he said. The second? Utilizing technology to analyze data.
Jon Handler, vice president of digital innovation for Baxter Healthcare Corporation, agreed. “The ability to actually have therapies that you don’t just look episodically at, but now make it a continuous effort is enabled by the digitization of healthcare and the increasing amount of data we’re using,” he said.
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Ultimately though, it comes down to guaranteeing all the beneficiaries — the patient, the health system and the payer — are getting value out of the product. “If you can provide a therapy or service that creates better outcomes at lower costs, there is value to be captured,” Handler said. “That kind of alignment is critical for moving healthcare forward.”
For early stage companies looking to step into the space, it’s challenging to not only have a stellar product, but also demonstrate its value. How can these startups be sure to catch the attention of VCs and potential acquirers? The panelists offered a bit of advice.
“Know it’s a strategic look that we provide,” Compton Ryan said. J & J Innovation’s number one calling is ensuring there’s clinical value, she added.
“Nothing demonstrates success like success,” whether in the form of clinical success or market success, Handler added. But it’s also about ensuring the company is doing something unique.
Schapeler noted that ensuring there’s a cultural fit between the companies is just as key. The companies’ teams must be able to smoothly work together. “That’s equally important for us,” he said.
Photo: Martin Barraud, Getty Images
