The venture capital and private equity investment firm formerly known as SV Life Sciences has changed its name to SV Health Investors to reflect its increased investment in health IT. SV Health Chairman Gene Hill spoke to MedCity News in a phone interview about its investment strategy, particularly for health IT investment, and the firm’s sixth fund, which has raised $400 million.
Initially, half of SV Health’s investments were allocated to biotech companies with medical device and healthcare services/digital health investments accounting for 25 percent each. More recently, over a period of years, Hill clarified, that investment allocation has shifted to 40 percent biotech, 40 percent healthcare services/digital health and 20 percent medical devices. That investment breakdown will be reflected in SV VI, which has raised $400 million.
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Looking back at the past five funds, the firm has invested in 30 companies per fund with an average of $15 million invested in those businesses, Hill said.
So what are some examples of digital health applications that interest SV Health? “We look at digitizing clinical trials as an exciting investment opportunity,” Hill said.
Asked which areas of health IT interest him, Hill said the firm has been looking increasingly at artificial intelligence, natural language processing, and neural networks.
The new fund, which it began raising in 2015, will invest in early stage opportunities across biotechnology and both early-stage and revenue stage medical devices businesses, the company statement said. The fund will also invest growth equity in healthcare services and digital health companies.
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When it comes to biotech, Hill said it looks to fund businesses before the completion of Phase 2 clinical trials.
For healthcare service and digital health businesses, the firm allocates growth capital for companies with established products and revenue trying to finance digital adoption.
“You don’t need to invest in a new company to gain the benefits of an established customer base that you can put on a new platform,” Hill said.
In addition to the SV Health funds, the firm also manages the Dementia Discovery Fund. Formed in 2014 by the UK government, the fund identifies new ways to produce disease-modifying treatments for dementia. Investors in the fund include Big Pharma companies and Alzheimer’s Research UK, among others.
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