Is it warranted to be pessimistic about the current state of digital health?

As Lisa Suennen said about this year’s JP Morgan Healthcare Conference, “There was a lot of optimism about the convergence of biotech, life sciences and health IT, but also there was a sense of foreboding that the party is over in some of these areas.”

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This week on MedHeads, we took a look back at the 2016 JP Morgan Healthcare Conference. Our reporters Meghana Keshavan and Stephanie Baum were joined by guests Kenneth Clark, a partner at Wilson Sonsini Goodrich & Rosati, and venture capitalist Lisa Suennen. Chris Seper hosted the discussion.

One common theme was addressing the fact that the biotech public markets have struggled as of late and what that means for the industry currently – whether or not it makes sense to be pessimistic or cautiously optimistic.

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Keshavan, Baum and Suennen all agreed that pessimism was palpable at the conference.

Suennen said, “There was a lot of optimism about the convergence of biotech, life sciences and health IT, but also there was a sense of foreboding that the party is over in some of these areas.”

“It’s definitely going to be a quiet year for IPOs in digital health,” Baum said. “I think people are going to be buckling down and getting ready for 2017. In 2015 we had Teladoc and Fitbit, but this year, there may be one or two, but it’s definitely going to be quiet on that front.”

Clark, on the other hand, represented the optimist camp when it comes to the various sectors.

“I think the pessimistic view represents more of what’s going on in the public market,” he pointed out. “I spend a lot of my time in the private market. Where I’m coming from is I see a lot of real value being created. What I’m seeing across the board are companies that are being created, maybe in the early stage, that are generating very strong data.”

He went on to explain that he believes there will be some billion dollar deals for acquisitions based on the conference within the next few months. He added that he doesn’t doubt, though, that there will be some companies with high valuation currently that end up going down.

Suennen clarified her perspective later in the broadcast by saying, “I don’t think pessimism is the right word. I think that ‘reality course correction’ is the right phrase.” She pointed out that companies, in digital health in particular, really have to prove value and that they lower costs as well as improving quality outcome patient experiences. That’s the ongoing challenge.

So what’s the best perspective to have moving forward in 2016 – remaining hopeful, or for better or worse, simply accepting that things might not be on the up and up this year?

Watch yesterday’s MedHeads broadcast below.

Photo: Screenshot via YouTube