Archive | June, 2018

In Mental & Behavioral Health, Investors Find Challenges and Opportunities

28 Jun

By James Huang, Research Analyst, LSN

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Mental and Behavioral Health contains many highly prevalent but stigmatized health conditions, which can lead to a lack of interest from investors, therefore prolonging the development of treatments for these conditions. The Redefining Early Stage Investments (RESI) Boston Summer Conference on June 4, 2018 included a panel devoted to “Investing in Mental and Behavioral Health” to shed light on the subject. Despite the stigma associated with mental and behavioral health, there are investors working in the space to identify and fund digital health solutions for these high-need conditions.

For the panel, five mental and behavioral health experts shared their insights on the advancement of digital health solutions for mental and behavioral health conditions. The panelists covered topics such as: the current progress, areas or technologies that may raise skepticism, what they hope to see in the future, and whether investors face a similar stigma for targeting these specialized companies.

The discussion between the panelists brought to light many issues, such as hesitancy to work with passive data collection in a space with sensitive information, and a reluctance to diagnose these disorders in primary care due to an inability to treat effectively. The discussion on passive data collection and the skepticism around it is particularly thought-provoking and discussed thoroughly in the second clip highlighted below. You can watch and learn from the panelists insights regarding each of the prompts listed.

Moderated by Julie Papanek Grant, Partner at Canaan Partners, the panel included:

  • Justin Baker, Scientific Director, The McLean Institute for Technology in Psychiatry
  • Ken Duckworth, Senior Medical Director for Behavioral Health, Blue Cross Blue Shield of MA
  • Robert Garber, Partner, 7wire Ventures
  • Eric Schaeffer, Senior Director, Neuroscience Innovation, Johnson & Johnson Innovation

Where Do These Investors See Progress?

What Areas/Technologies Are These Investors Skeptical About?

What Types of Technologies Do They Want to See in This Space?

Is There a Stigma Towards Investing in Mental and Behavioral Health?

As Robert Garber from 7wire Ventures mentioned, digital health solutions for mental and behavioral conditions, was not thoroughly reviewed at all when he first explored investment opportunities in 1996 despite the prevalence of mental health being ignored. Since then the topic is more openly discussed, so investors have seen a floodgate open resulting in a substantial increase in startups focused on mental and behavioral health.

As Ken Duckworth from BCBS of Massachusetts states, given the long history of prejudice and injustice for those suffering from mental and behavioral disorders, there’s a hesitancy to provide data given privacy concerns. While there still aren’t any solutions to adequately protect privacy concerns, this panel hopes to bring an even wider audience to the discussion to advance further ideas and potential treatments.

This panel will continue to be part of the agenda during RESI Healthtech Week featuring new voices and expertise, so if you’re interested in watching the live discussion on this topic, please be sure to join us there on September 6, 2018 too.

Hot Investor Mandate 1: Global VC Firm Headquartered in Asia Invests in All Parts of Therapeutics, Medical Devices, Diagnostics, and Digital Health

28 Jun

A venture capital firm founded in 2005 has multiple offices throughout Asia, New York, and San Diego. The firm has closed its fifth fund in 2017 and is currently raising a sixth fund, which the firm is targeting to be the largest fund to date. The firm continues to actively seek investment opportunities across a wide range of industries. 1/3 of the fund is dedicated to global/USA-based life sciences and healthcare investments, while the rest of the fund will focus on investing in Asia-based companies. On average, the initial size of investment is in the $2-5M range but the firm has the capacity to invest more in companies they identify as a strong fit. The firm can participate anywhere from Seed to Series B, but Series A is their sweet spot.

The firm is an opportunistic investor and will consider therapeutics, medical devices, diagnostics, and healthcare IT companies. However, the firm will generally avoid single therapeutic assets and those that are pre-clinical or earlier. The firm is open to novel medical devices of all FDA regulatory pathways, including 510k and PMA. The firm is strongly interested in platform plays, or technologies that have implications in multiple disease areas or indications. Examples include novel drug delivery platforms, drug discovery platforms that leverage AI or machine learning, regenerative medicine, etc.

The firm considers the management team’s character and entrepreneurial spirit – more so than the team’s experience – as one of the most important factors in the investment screening process. Each partner of the firm will dedicate their time to become acquainted with the management team and determine their degree of fit. The targeted market and the company’s competitive edge are also important considerations. The firm prefers to act as the lead investor and will seek board representation, but is also open to co-investing.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com.

Hot Investor Mandate 2: USA-Based Venture Capital Firm Invests in Medical Devices, Diagnostics, and Digital Health with Strong Interests in Applications of AI and Machine Learning

28 Jun

A venture capital company founded in 2005 and located in California manages just under $70 million in assets across 2 funds and makes equity investments into companies ranging from a few hundred thousand dollars to $2 million with additional capital reserved for follow on rounds. The firm is looking for companies located throughout the United States and plans to make 4 new investments over the next 6-9 months.

The firm is looking for companies developing Medical Devices and Diagnostics, Healthcare IT products and Life Science Research Tools with an emphasis on fast to market low capital intense products that reduce the cost of delivering quality healthcare. For Healthcare IT investments the firm is most interested in machine learning and artificial intelligence (AI) applications and is generally not interested in Telehealth and EMR solutions. The firm is open to all sub-sectors and indications in the Medical technology space except for those targeting diseases and disorders of the spine. The firm will invest in both seed and later stage companies.

The firm is looking for companies with skilled and experienced management teams. The firm generally looks to take a board seat into companies after investment and play and active role in the management. The firm is willing to invest in both public and privately held companies.

If you are interested in more information about this investor and other investors tracked by LSN, please email mandates@lifesciencenation.com.

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