di , 01/02/2024

Let’s take a look back at the most intriguing updates I’ve shared this month on innovation and digital health!

Deeptech investments were one of the most resilient categories in 2023. However, did you know that 95% of patents in Europe remain inactive and never find their way into companies?

I have been working with and reading a lot about deep tech lately, and there is a lot of optimism in this category. For example, amidst an overall funding decrease in 2023, deeptech startups in Europe are estimated to get almost the same amount of funding in 2023 as in 2022 ($17.6 billion vs. $18.9 billion).
Together with being among the most resilient, it’s also the largest category in VC, followed by energy and tech. 
However, one figure that got really stuck in my mind is that 95% (!) of Europe’s patents never find their way into companies and products (Deep Tech report by Dealroom.co and Walden Catalyst Ventures). I feel like this is something we need to address with strong partnerships between universities, industry, hospitals, and the public sector working together.

A busy start of 2024 in digital health with several big partnerships between pharma and digital health or therapeutic companies (Vicore Pharma AB & Alex Therapeutics, Aptar Digital Health & Gerresheimer, MENARINI Group & Insilico Medicine) plus FDA approval of DTx for schizophrenia by Click Therapeutics, Inc. and Boehringer Ingelheim, and more.

EVERSANA shares an expert article on patient adherence that delves into the main causes of poor adherence rates across the patient journey and the sophisticated solutions necessary to counteract this widespread issue. It is estimated that up to 50% of treatment failures can be attributed to nonadherence, resulting in 25% of hospitalizations and approximately 125,000 deaths annually in the United States (U.S.), costing an estimated $100-300 billion in avoidable healthcare expenses each year.

2023 in digital health and 2024 outlook: a summary of reports by PitchBook, HSBC, and also Rock Health (For the full version, go to the newsletter of Nicola Mattina here.)

Both reports approach the healthcare market in 2023 from different perspectives: Pitchbook has more statistics on PE/gglobal VC investments, IPOs, deals in biopharma, and some specific trends like AI or surgical robots, while the HSBC Report offers a bigger investment and financial deep dive by category or therapeutic area. 
I was curious to look at both at the same time, as combined, they offer a great overview of the year in health technology.
Some insights from Pitchbook:
Healthcare’s share of global private equity (PE) and venture capital (VC) deals is declining due to the pandemic’s impact. After peaking in 2020 at 18.4%, it dropped to 16.5% in 2023, with further decreases projected for 2024. Digital health exits are expected to rise in 2024, but challenges persist, including limited investor demand for unprofitable IPOs. Biopharma startups will require stronger clinical validation, like successful phase 2 trials, before pursuing IPOs. Generative AI is anticipated to disrupt care coordination, reflecting a shift toward AI solutions in healthcare.

Some insights from HSBC:
In 2023, the healthcare market stabilized, but new investor rates dropped by 28%. Despite this, the top deals still saw valuation increases. However, about 50% of healthcare financings were add-on or insider rounds, posing challenges for 2024 fundraising. VC investment in healthcare decreased by 28% from 2022 and 53% from 2021. There’s a shift towards focusing on fundamentals and later-stage clinical exits in health tech investments.

France is taking over digital health in Europe. Here is another exciting reading by Tara Donnelly.

France stood out among Europe’s top 10 tech markets in 2023, with only Italy matching its increase in VC fund closures. French VCs closed 29 new funds, raising €4.7 billion, up from €4.4 billion in 2022. The growth is credited to France’s expanding VC ecosystem, supported by government and Bpifrance funding. Bpifrance’s commitment to funds increased to €1.6 billion in 2022, supporting various programs from accelerators to late-stage growth equity. French VCs announced 11 new fundraisings in Q4 2023, including the Sofinnova Partners Digital Medicine fund (€190 million). France ranked 6th globally in health-sciences research output, and Assistance Publique-Hôpitaux de Paris made the Nature Index global top 15 for research output. Despite challenges, France is emerging as a promising market for VC and digital health.

An AI startup called Anthropic, an OpenAI competitor backed by Amazon, co-authored a study on deceptive behavior in AI models. AI models learn quickly how to be deceptive, which cannot be easily reversed. Moreover, safety training techniques not only won’t reverse deception but could make it worse and reinforce it.

Enough is being posted on AI and how it’s undoubtedly going to transform all industries, including healthcare, but I found this paper curious to share.
Researchers at AI startup Anthropic, an OpenAI competitor backed by Amazon, co-authored a study on deceptive behavior in AI models (10 January 2024). They found that AI models learn very quickly how to be deceptive, which cannot be easily reversed. Moreover, safety training techniques not only won’t reverse deception but could make it worse and reinforce it.

What’s happening with VR investments and the new VR device by the Finnish company Varjo?

Varjo‘s latest XR-4 device showcases exceptional quality and resolution, catering to industries like defense, automotive, space, and healthcare for training purposes. While XR and VR are finding applications in healthcare, the industry faces market challenges.
Crunchbase‘s recent report on metaverse, VR, and AR investments highlights stability in 2022, with $5.73 billion invested across 576 transactions, akin to 2021 figures. However, 2023 witnessed a significant downturn, with investments plummeting to $1.97 billion across 226 transactions. Notably, there were no US rounds exceeding $100 million in this sector.
The decline might echo the 2023 digital health funding drop, signaling a shift towards results and adoption over hype. This trend could lead to industry consolidation, with fewer but stronger players focused on delivering tangible value. The future trajectory remains to be seen.

7 Open Innovation Trends as the Industry Turns 20+ Years.

The open innovation industry is now 20+ years old, which means it’s gone through stages of early development, strong growth, and big hype and is now recalibrating and reaching maturity.
Key trends in 2024 include shifting focus from ‘why’ to tangible results, moving towards industry-specific verticals, focusing on education and change management, gaining momentum in ecosystem engagement, emerging corporate innovation models, smaller players participating, and opportunities for experts in complex industries.

“Although women account for 70% of chronic pain patients, 80% of pain medication has been tested only on men or male mice.”
2023 Women’s Health Updates Summary: new FDA approvals, government initiatives in Canada and the UK, and, of course, the McKinsey & Company report and Kearney and FemTechnology present an open letter in Davos.

In Canada, British Columbia launches a pioneering self-screening cervical cancer plan. Qvin secures FDA approval for the first menstrual blood health testing pad. Flo Health Inc. presents groundbreaking research on acute stress’s impact on pain perception in women during the Russia-Ukraine conflict, published in Nature NPJ Mental Health.
Women’s health dominates the Davos summit, according to McKinsey & Company’s report. Kearney and the FemTechnology Summit collaborate on an open letter and a $55 million initiative. Despite a challenging investment market, Midi Health, a virtual menopause care startup, raised $60 million, just four months after their last funding round

Ophthalmology is a niche field, and not so much is published around innovation in the industry, so let’s take a look.

The French Tilak Healthcare has announced positive results from its TIL002 study using the OdySight® app (a prescription-only CE-marked medical device), which allows patients with retinal diseases to monitor their vision themselves. 
The prospective multi-center study showed a high level of convergence between at-home evaluations of visual acuity measured with OdySight® and standard methods used during consultations, showing the solution’s reliability. 
The numbers: the study looked at 58 patients and 105 eyes and took place over 1.5 years across 3 centers in France.

“As interest in AI calms down, make sure not to overlook quantum.” State of Quantum 2024: Report Takeaways. Healthcare is one of the three industries expected to be influenced by quantum technologies.

IQM Quantum Computers, with OpenOcean, Lakestar, and TQI, reported on quantum tech. The top impacted sectors are healthcare, cybersecurity, and finance. Quantum gets <1% of VC funding and faces challenges in finding small-scale use cases with limited budgets. It enhances AI, and in 2024, more organizations are expected to become ‘quantum ready’ with a focus on immediate value through hybrid systems. Challenges include high costs and security concerns. In healthcare, quantum could expedite therapeutic discovery, improve diagnostics, enable personalized medicine, and enhance data-driven health policy planning.

Original post published on LinkedIn Pulse