Friday, July 22, 2016

Life Sciences Investors and Pharma/Biotech Corporations﻿

IoT and Connected Health are attractive opportunities for Life Sciences Investors and Pharma/Biotech Corporations.

The emergence of Internet of Things (IoT) has significantly accelerated Connected Health. IoT is the vast network of items and devices that connect to the internet, regularly via a wireless connection so that data can be shared, stored, sent, managed and used effectively with maximum efficiency and security.

Life Sciences Investors

For Life Sciences VC and PE investors, investing at the interaction of data and healthcare is a strong value proposition.  Most of the data assets have low intrinsic risk compared with Life Sciences assets/opportunities. So a traditional Life Sciences investment manager, investing in digital health is taking a low risk.

The gestation periods associated with IoT/Connected Health investment opportunities are much shorter than those of Life Sciences assets/opportunities, making returns on investment higher.  There might be market inefficiency due to the convergence of two seemingly different sectors, giving one a chance to invest at a favourable price.  Finally, attractive exit options exist as the major healthcare providers, pharma/biotech etc. are interested in the Digital health area.

For pharma/biotech corporations, entering the IoT/Connected Health space is critical. Most pharmaceutical and biotechnology corporations are seeking to enhance their assets/brands, and adding a digital facet is a relatively easier, cost-effective and time-efficient option. With the general trend towards 'outcome based pricing', most pharma/biotech corporations have demonstrated (are demonstrating) increased adherence and prevention, leading to better outcomes for patients, less hospitalisation and cost savings for the healthcare providers. This translates into a persuasive real-world evidence-based value story that payers prefer.

Operational efficiency gain is another reason for pharma/biotech corporations to be partnering with data/device makers, particularly in areas such as clinical trials, regulatory filings, post-marketing monitoring, etc.
IoT/Connected Health per se is not a core competency of pharma/biotech corporations, so they routinely complement this by engaging in licensing and partnering deals. Rivalry among the pharma/biotech is driving many deals in the Digital health area covering multitude diseases and the trend is likely to continue. This in turn increases the likelihood of successful exit for investors, data and connected health companies.


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