The FemTech Foundation—and Fault Lines

In 2015, fewer than 300 ventures focused on women’s health existed. That number has tripled to 942, according to the Galen Growth HealthTech Alpha™ platform. These ventures now span the female health continuum—gynecology, menopause, oncology, cardiovascular disease, mental health and beyond.

Yet the investment tide has not fully turned in FemTech’s favor. While partnerships have risen 15.3-fold during the past decade, capital deployment has grown only 1.4 times. Compare that to the 2.6x expansion of digital health investments. In 2024, FemTech secured $2.2 billion in funding, a sliver of the $26 billion digital-health pie.

This disparity isn’t due to a lack of innovation—quite the opposite. The problem is systemic: funding gaps, policy voids, and clinical blind spots that overlook the $360 billion “ghost market” of women’s health. That phrase— “ghost market”—is the report’s haunting term for the opportunities left untouched by current investors and providers alike.

From Fertility to Full Spectrum

One of the report’s most critical takeaways is how much the FemTech category is maturing. Fertility tracking and pregnancy apps put the field on the map. But FemTech today is far more.  It recognizes the vast need for medicine to engage with women’s unique health needs, long unaddressed.

The Galen Growth data shows that while gynecology and oncology account for more than half of all FemTech ventures, menopause, chronic pain, autoimmune conditions, cardiovascular disease and mental health are surging into the investment and innovation spotlight. These are not “niche” categories—they represent common, often underdiagnosed or misdiagnosed conditions that disproportionately affect women and impair their quality of life.

This expansion reflects a growing recognition that women’s health is not a subset—it’s a central pillar of public health. As de Salaberry writes in a soon-to-appear Health Tech World byline: “To be transformative, FemTech must address the entirety of the women’s health continuum, including those therapeutic areas that are not traditionally branded as female-specific but affect women in distinct ways.”

Twice the Clinical Evidence—But Still Under Scrutiny

Perhaps the report’s most sobering—and telling—data point is that FemTech ventures generate nearly twice the volume of clinical trials, peer-reviewed research, and regulatory filings as their digital health peers. Twice. That’s not due to past scientific rigor; these companies are held to a higher standard. Founders and advocates must go the extra mile to validate the clinical value of their solutions.

Despite this, systemic barriers remain. The report shows 71 percent of early-stage FemTech ventures struggle to raise a Series A round. Funding the “middle”—those post-seed but pre-scaleup companies—is an urgent priority. Without it, too many promising solutions will stall before reaching the women who need them.

Let’s be clear: this isn’t just about meeting investor milestones. It’s about delivering equity in care. Cardiovascular disease is the leading cause of death among women, yet it remains underrepresented in FemTech portfolios. Alzheimer’s and autoimmune conditions disproportionately affect women, yet receive comparatively little innovation focus.

Those are not oversight gaps. They are deep, systemic failures – disparities in our health innovation system.

From Direct-to-Consumer to Deep Health Integration

Another significant signal of maturity is the shift away from pure direct-to-consumer (DTC) models. In 2024, 42 percent of FemTech partnerships involved health systems, up from just 10 percent in 2020. That’s a tectonic shift from point solutions to systemic integration.

As de Salaberry puts it, “DTC strategies alone cannot reach underserved populations or secure the reimbursement pathways necessary for scale.” Systemic integration—through payers, providers, and public institutions—is essential for sustainability and access. FemTech must live where care happens, not just on consumers’ cell phones.

Regionally, the picture is just as telling, with Europe leading in clinical rigor, with 50 percent of FemTech ventures demonstrating proven clinical strength. North America leads in funding ($1.3B), while Asia-Pacific remains a hub of AI-driven diagnostics, even amid a dip in capital investment. These trends point to what’s next: a future driven by localization, clinical excellence and technology convergence.

Forces Shaping the Future of FemTech

The report outlines five key factors shaping the FemTech evolution during the next five years. They’re worth noting for anyone investing, innovating or advocating for equitable care with an eye toward return on investment:

• Redefining the Scope: FemTech must look beyond reproductive health to address chronic diseases, aging, and behavioral health.
• Breaking the DTC Mold: Success will be defined by integrated partnerships with employers, insurers, and health systems.
• Balancing Rigor and Agility: Regulatory requirements must support innovation without stifling it.
• Funding the Growth Gap: Series A and B support is critical to help early innovators scale.
• Smart Consolidation: M&A isn’t just about exits—it’s about building category leaders with breadth and credibility.

Infrastructure, Not Hype

The key here is infrastructure. FemTech is not a trend—it’s the scaffolding of women’s health innovation. Investors need to hear that message and invest to make this population health category viable.

With nearly half the global workforce made up of women, the ROI on women’s health is not just moral—it’s macroeconomic. The health ecosystem can no longer afford to treat women’s health as an edge case. It is, in fact, the core of population health.

FemTech’s next chapter will be shaped by evidence, equity and integration. It must also be underpinned by trust from payers, providers, and patients. That trust is earned through data, outcomes and the bold assertion that women’s health is health, full stop. This Galen Growth Report goes a long way to demonstrating the positive outcomes when innovation and investment converge.

As Julien de Salaberry wisely states: “The next generation of Femtech isn’t about visibility—it’s about value, integration, and health systems impact.” That’s not just a forecast—it’s a framework for what’s next.

[Editor’s Note: For a deeper dive into the Galen Growth FemTech 2025 report, visit galengrowth.com. The full report and press release, are available now.]

The post Galen Growth FemTech 2.0 Report: Elevating Women’s Health from Niche to Necessity appeared first on Medika Life.

For the more than 37 million Americans who suffer from migraines, the FDA authorization of Click Therapeutics’ CT-132—the first prescription digital therapeutic for the preventive treatment of episodic migraine—is more than a headline. It offers the potential for expanded access, improved quality of life, and the legitimization of digital medicine as a cornerstone of care.

Rewriting the Migraine Narrative

For people living with episodic migraine—those experiencing up to 14 migraine days a month—prevention is critical. Migraine is far more than “just a headache.” It is a neurological disease that can be disabling, impacting work, relationships, and emotional well-being.

According to the American Migraine Foundation, almost 90 percent of people with migraines are unable to work or function normally during an attack. What’s more, only about 12 percent of those with migraines receive preventive treatment—a treatment gap due to side effects, fear, access barriers, or lack of awareness.

“This is where CT-132 emerges as a potential game-changer,” said Click Therapeutics Founder and CEO David Klein in an exclusive comment to Medika Life.  “We’re entering a new era of migraine care—where doctors can harness the power of both proven medicines and clinically validated digital therapeutics to meet patients’ urgent needs.”

Data That Delivers

Until recently, the FDA approved most digital health approaches under the device 510K pathway with limited clinical data.  FDA marketing authorization for CT-132 was supported by biopharma-like data from the pivotal ReMMi-D randomized controlled trial, in which CT-132 met its primary endpoint by significantly reducing monthly migraine days on top of background pharmacotherapy,

In the bridging study, ReMMiD-C, CT-132 showed similar performance in patients on prescription calcitonin gene-related peptide (CGRP) inhibitors such as Aimovig (erenumab), Ajovy (fremanezumab), Emgality (galcanezumab), Vyepti (eptinezumab), Ubrelvy (ubrogepant), Nurtec ODT (rimegepant), and Qulipta (atogepant).  CT-132 is an adjunctive treatment to medication, giving it broad potential use.

CT-132, delivered via a mobile app, achieved statistically and clinically meaningful results in the ReMMi-D pivotal trial. Participants who used the digital therapeutic reported a mean reduction of 3.04 monthly migraine days, compared to just 0.9 days in the sham group (p=0.005). That means real days—at work, with family, outside in the sun—returned to people’s lives.

In a condition where every single migraine-free day matters, the ability to deliver those gains without pharmacological side effects through a smartphone app democratizes access to care. It opens the door to new options, particularly for those who cannot tolerate or access traditional therapies.

“This marks a significant milestone for the more than 37 million adults in the US who live with migraine,” said Shaheen Lakhan, MD, PhD, FAAN, Chief Medical Officer of Click Therapeutics. “CT-132 offers eligible patients a new path to reducing the burden caused by migraine—one they can access anywhere via an evidence-based mobile application on their smartphone.”

Digital Care, Doctor-Led

Importantly, CT-132 does not sideline clinicians—it includes them as front-and-center leaders in care delivery. As a prescription-only digital therapeutic, CT-132 is designed to be used under the guidance of a health provider, adding a new clinical approach to physician-directed personalized care. It enhances—not replaces—traditional physician-patient relationships by enabling clinically validated, behavior-based treatment delivered consistently between visits.

Neurologists and primary care providers who manage migraines now have an evidence-based, non-drug adjustive approach to care, especially to patients who have tried multiple therapies and continue to have breakthrough episodes.

Data is the Gatekeeper

The approval also signals a broader truth long-awaited in digital health: evidence is everything. As digital therapeutics gain traction, the FDA and the medical community are asking for the same rigor as traditional pharmaceuticals.

“For digital health ventures to gain the confidence of regulators, providers, and patients, clinical validation must be central,” said Julien de Salaberry, CEO of Galen Growth. “This approval is a reminder that digital therapeutics can meet gold-standard evidence expectations—and that’s how they earn a place in modern medicine.”

[See Medika Life special report: Consumer HealthTech: A Data-Driven Evolution in Health Engagement]

According to Galen Growth analytics, only 24 percent of digital health companies globally have demonstrated clinical strength through trials or peer-reviewed publications. CT-132 stands out and sets the bar. Generating clinical evidence in digital health has become a marker for success. Galien Growth recently published its landmark analysis of digital health and consumer use, which includes the importance of data for product and category progress.

A Future Forward

The approval of CT-132 reflects a movement in medicine, reimagining how we define treatment, access, and wellness. It’s a reminder that innovation is not just about what is possible, more importantly, what is proven. As more digital therapeutics enter the pipeline, the CT-132 journey offers a case study of what it takes to cross the threshold from hope to health reality.

This approval to market brings something invaluable to people with migraines: urgency. The ability to be treated anywhere, on their terms, using science-backed interventions, gives people not just fewer migraines but more voice in their care.

This is not just a regulatory milestone. It’s a human one.

[This article is not sponsored or requested by any company. The author has been covering digital health since 1995 and seeks to highlight sector trends. He maintains editorial independence.]

The post A Digital Turning Point in Migraine Care: CT-132 FDA Approval to Market is a Win for Patients and Proof that Clinical Evidence Matters appeared first on Medika Life.

According to the report, global investment in Consumer Health Technology grew by 9% in 2024, totaling $4.5 billion. This increase reflects investor confidence in technology-driven health solutions and signals a shift toward consumer empowerment. However, despite the surge in funding, the report underscores persistent challenges, including a clinical validation gap that could hinder long-term adoption and trust.

“The Consumer HealthTech sector is at a pivotal moment,” said Julien de Salaberry, founder and CEO of Galen Growth. “We are witnessing the continued health-sector evolution where consumers seek to secure stronger ownership over their health and well-being. People who succeed in using their buying power to secure innovation with clinical validation will shape the future of health.”

Investment and Market Dynamics

Galen Growth’s report reveals a complex funding environment where record investment is contrasted by uneven access to capital. While total investment rose to $4.5 billion in 2024, the market remains heavily weighted toward early-stage ventures:

• 75% of Consumer HealthTech ventures are still in the seed stage, highlighting the challenge of securing Series A and beyond.
• Only 25% of ventures incorporated in the last seven years have progressed to Series A or beyond.
• 11 mega deals (valued at over $100 million) accounted for 37% of overall funding, reflecting investor appetite for mature ventures with proven models.

Regional Investment Trends

North America remains the dominant market, capturing 64% of total funding and securing 78% of global venture capital deals. The region’s leadership in funding reflects its mature digital health ecosystem and strong investor appetite for high-growth, technology-driven health solutions.

Europe attracted 24% of global funding, focusing on corporate health and wellness solutions. In contrast, the Asia-Pacific region secured 12% of international funding, driven by increased investment in preventive health marketplaces and telemedicine.

Notable Deals from 2024:

• Neko Health secured a $260M Series B for its AI-driven preventive health model, which is focused on early detection and personalized treatment recommendations.
• eGym, a global fitness technology leader, raised $201M in a Series H to expand its connected training platform and enhance its AI-powered coaching system.
• Spring Health, a mental health platform, raised $100M in a Series E to scale its personalized therapy and mental wellness offerings.
• Flo Health, a women’s health app focused on menstrual cycle and fertility tracking, raised $200M in a Series C to expand its product offerings and global reach.

Mental Health Takes the Lead

Mental health emerged as the dominant focus in Consumer HealthTech in 2024, attracting 29% of total funding—underscoring the growing recognition of mental well-being as a vital part of overall health.

“Consumer HealthTech has the power to democratize health by giving individuals greater control over their health,” added de Salaberry. “But for this potential to be realized, ventures need to address the division between the haves and have-nots and the clinical evidence gap to demonstrate measurable health outcomes.”

The rise in mental health investment reflects a shift toward more personalized, technology-driven care models. Consumers increasingly expect the same level of convenience and personalization in health that they experience in other industries, such as retail and finance. This demand has spurred innovation in teletherapy, mental health apps, and AI-driven cognitive behavioral therapy.

Key Therapeutic Areas:

• Women’s Health saw a surge in funding, capturing 20% of total investment. Startups like Flo Health are capitalizing on the growing demand for reproductive health and fertility tracking.
• Preventive Health attracted 17% of funding, driven by the rise of AI-powered diagnostics and real-time health monitoring.
• Sleep and Cognitive Health solutions are also gaining traction as consumers seek to improve overall well-being through better sleep quality and cognitive enhancement.

Strategic Partnerships and M&A Activity

Partnerships and consolidation play a critical role in the sector’s growth:

• More than 900 new partnerships were formed in 2024, signaling growing collaboration across the health ecosystem.
• Venture-to-venture acquisitions accounted for 79% of M&A activity, highlighting how companies are using consolidation to strengthen market presence.
• Notable partnerships included:
  • Pfizer partnered with GoodRx to improve medication management and strengthen direct-to-consumer outreach.
  • Amazon expanded its mental health footprint through a strategic partnership with Talkspace for teleconsultation services.
  • Mayo Clinic partnered with Prenetics to advance genomics-based health solutions and expand access to precision medicine.

This trend toward consolidation reflects increasing pressure to scale solutions and navigate complex regulatory and reimbursement landscapes. More prominent players are looking to leverage established consumer brands and data platforms to enhance their competitive positioning.

Issues and Prospects

Despite the rise in funding and market activity, the Consumer HealthTech sector faces critical challenges:

• Clinical Validation Gap: The report highlights that Consumer HealthTech ventures exhibit an 11% lower clinical evidence signal than the broader digital health ecosystem. This gap raises concerns about scientific rigor and long-term adoption.
• Funding Bottleneck: Early-stage ventures struggle to secure Series A funding, with most capital concentrated in late-stage deals.
• Accessibility and Equity: Unlike traditional health, which is often covered by insurance, Consumer HealthTech solutions rely heavily on out-of-pocket spending. This creates a divide between those who can afford premium health services and those who cannot.

“The health sector cannot afford to become a system of haves and have-nots,” said de Salaberry. “Consumer HealthTech ventures must work to close the accessibility gap by developing affordable solutions and proving their clinical value.”

Future Trends and Market Outlook

The Galen Growth report identifies several key trends shaping the future of Consumer HealthTech:

• AI-Driven Personalized Medicine: AI-powered diagnostics and health assistants enable hyper-personalized treatment plans based on genetic, biometric, and behavioral data.
• Hybrid Models: Successful Consumer HealthTech ventures increasingly integrate with traditional health systems to improve credibility and adoption.
• Regulatory Oversight: Governments and regulators will likely increase scrutiny over health claims and data privacy, creating startup opportunities and challenges.
• Equity and Affordability: To achieve long-term impact, Consumer HealthTech solutions must address disparities in technology access and affordability.
• Digital Therapeutics: Prescription-based digital interventions for managing chronic conditions are poised to bridge the gap between technology and evidence-based care.

A Defining Moment for Consumer HealthTech

Consumer HealthTech represents a seismic shift in health—moving from reactive to proactive care. As Galen Growth’s report reveals, the future of health lies in empowering individuals with technology-driven solutions that provide real-time insights and personalized care.

The rise of AI-driven diagnostics, wearable technology, and telemedicine enables consumers to monitor and manage their health in real time. This shift toward preventive care improves outcomes and reduces the burden on traditional health systems.

However, sustainable growth requires stronger clinical validation and deeper integration with established health frameworks. Consumer HealthTech ventures must navigate the complexities of reimbursement, regulation, and market competition to secure long-term success.

The Galen Growth report makes it clear: The future of health belongs to those who empower consumers—and prove it works.

The post Consumer HealthTech: A Data-Driven Evolution in Health Engagement appeared first on Medika Life.

Scientific Progress for Patients and a Category

At the core of the ReMMi-D trial was the evaluation of CT-132, a prescription digital therapeutic, for the preventive treatment of episodic migraine. The study included 568 participants and was designed with the scientific rigor traditionally associated with pharmacological interventions. The results were compelling: patients using CT-132 experienced a reduction during three-monthly migraine days by the end of the 12-week treatment, a key metric in migraine management.

More than reducing the frequency of migraines, CT-132 showed improvements in patient-reported outcomes related to quality of life and disability, such as the Migraine-Specific Quality-of-Life Questionnaire and the Migraine Disability Assessment. These metrics matter because migraine is a neurological condition that disrupts life activities, affecting employment and social relationships. For the millions of people who have unpredictable and disabling migraines, improvement can have profound quality of life.

According to a statement by Shaheen Lakhan, MD, PhD, FAAN, chief medical officer of Click Therapeutics:“Click has developed and evaluated a first-in-class digital migraine preventive therapeutic, CT-132, in 2 separate clinical studies to demonstrate a reduction in monthly migraine days, the gold standard measure. We look forward to advancing our FDA Breakthrough Designated asset through regulatory clearance and, if successful, offering a new therapeutic option that can be delivered to any eligible patient with a smartphone, meaningfully enhancing access to care.”

Building on Existing Treatment Possibilities

Migraine remains one of the most debilitating neurological conditions, affecting more than 37 million Americans. Despite pharmacological treatment advances, many people still find their lives shaped by frequent, unexpected, debilitating episodes. Existing medications can be effective, yet they don’t work for everyone and at every instance.  Some patients struggle with adherence, side effects, or simply the anxiety around consistent relief.

CT-132 holds the potential for a new kind of intervention. Delivered by a smartphone, this digital therapeutic is designed to work alongside patients’ existing medications, augmenting their current treatments rather than replacing them. Notably, the trial was designed to evaluate CT-132 in patients already using standard migraine medications. Data from the trial points to the efficacy of CT-132 as a stand-alone intervention and suggests an additive benefit when combined with existing FDA-approved pharmacological treatments.

This approach is key to conditions like migraine, where no single treatment is universally effective. For many people, managing migraine calls for a combination of therapies—some interventional, others pharmacological, and still some behavioral. CT-132’s success demonstrates that digital therapeutics have the potential to be additive to that combination, helping people regain control over their condition.

A Potential Step Forward for Digital Health

The results of this trial are even more noteworthy for an entire sector because CT-132 is one of the first digital therapeutics to be evaluated with the same rigorous standards typically applied to pharmaceutical interventions. The randomized, double-masked, controlled study design is a gold standard in clinical research, and Click Therapeutics has brought that level of precision to the digital health category.

Stan Kachnowski, PhD, MPA, founder of HITLAB and a prominent figure in health informatics, has also echoed the importance of this transformation, stating previously that “The convergence of digital therapeutics and traditional healthcare is one of the most promising avenues for improving patient outcomes. Clinical data helps substantiate the effectiveness of digital interventions, paving the way for broader adoption in complex diseases like migraine.”

Digital health has often been touted for its innovation and potential, but the field has faced great skepticism around its ability to deliver scientifically proven results. The CT-132 trial is an answer to those on the sidelines, demonstrating how digital therapeutics—with ample clinical data—can improve people’s outcomes. The nearly 100% completion rate of daily tasks in the trial speaks to the potential for sustained patient engagement, an essential factor in the long-term success of any therapeutic intervention.

Recent FDA guidance on Prescription Drug Use-Related Software (PDURS) opens the door to a new treatment category combining digital and pharmacological interventions. The data from CT-132 adds weight to this model, opening the wide door to showing how digital therapeutics can support existing treatments and may offer added measurable benefits.

What This May Mean for Consumers

The implications of this study are significant for people and physicians who treat migraines. Beyond diagnosis, migraine is more than a medical condition—its constant presence dictates when and how people can work, study, and socialize. The Click Therapeutics data suggest a new avenue of relief that is readily accessible and shows the potential to reduce the burden of migraine in daily life.

In digital health, data is key.  Julien de Salaberry, CEO and founder of Galen Growth has often emphasized: “Data is the defining difference in how we can transform digital health into a category with the same rigor and trust as traditional biopharma.” This sentiment captures the critical role that data plays in not just validating the efficacy of digital therapeutics but also in driving their adoption and integration into mainstream healthcare​.”

Moreover, the trial was designed to be used alongside existing medications, which could assist people who feel they have already exhausted their treatment options. This is important for those who experience ongoing migraine symptoms despite the use of preventive, newer migraine medications. Digital therapeutics with demonstrated data may provide an added layer of treatment that doesn’t require the introduction of more drugs or drug-related side effects.

Future of Migraine Treatment and Digital Health

This trial’s success is more than a win for Click Therapeutics—it signals what’s possible in digital health. In demonstrating that a digital intervention can demonstrate clinical outcomes in a condition as debilitating as migraine, CT-132 may have set the bar for digital therapeutics and offers private and public payers reason to become excited about the category.

As more digital therapeutics enter the clinical landscape, their ability to integrate with and enhance traditional treatments will be crucial to their success. This trial shows that digital solutions can do more than provide “feel-good” supplementary support—they can drive measurable improvement in patient health. The data are essential to showing that hype cannot be a clinical option; digital health must deliver high evidence before being considered a serious patient option.

By setting this new precedent for clinical validation, Click Therapeutics has contributed to a more significant shift in how we think about digital health. It’s not just about innovation for its own sake—it’s about how technology can change how we manage health when designed with scientific rigor and people’s needs in mind.

The post Forget Hype – Digital Therapeutic Data Show the Category Can be Held to High Clinical Standards appeared first on Medika Life.

With an impressive $12.4 billion invested across 719 deals, this period defied expectations of a prolonged funding winter and showcased remarkable growth. These deals span a wide range of digital health subsectors, from AI and LLMs to health information management and connected medical diagnostics. The industry saw a significant surge in momentum in Q2 2024, outperforming Q1 with $7.1 billion in funding compared to $5.3 billion.

Key areas such as AI, LLMs, health information management, connected medical diagnostics, and research solutions (i.e., TechBio) have emerged as focal points for VC and corporate incubators, accelerators, and equity funds, so critical to providing the financial and strategic support necessary to jump-start early-stage companies. A steady stream of M&A activity and strategic partnerships indicate ongoing global digital health market consolidation.

Galen Growth has been tracking every detail and deal and analyzing the digital health sector’s ups and downs, and it has now returned to the forefront of the C-Suite. To arrive at its analyses, Galen Growth tracks some 500 million data points across 30,000 sector players. Medika Life was able to preview some of the data to provide these highlights. Our assumption all along is that the spike in COVID-era investment was pure enthusiasm absent due diligence and that the category would rebound. This report confirms that hypothesis.

Medika Life readers can access the H1 2024 report here:

https://www.healthtechalpha.com/research/h1-2024-digital-health-global-key-trends-report

H1 2024 Growth

The $ 12.4 billion investment in the first half (H1) of 2024 is a significant milestone, marking a 5% increase compared to last year’s H1 2023. This robust performance challenges the narrative of a funding winter, showcasing sustained investor confidence. Q2 outpaced Q1 significantly, with a 34% increase in funding, indicating growing momentum.

“Anyone who thought digital health growth is stagnant was proven wrong by this recent finding data.  Investors find the value in these innovations – the challenge that remains is about the culture of the health sector – the role of the health care community in embracing these technologies,” reflects WebMD Chief Medical Officer John Whyte, MD, MPH, who has been a national voice on the potential of smart medical devices to improve people’s care.

More than 1,600 investors participated in H1 2024, with 50 making more than three investments, up from 47 in the previous year. This suggests a renewed confidence and a growing core of committed digital health investors. Key indicators such as the high number of mega deals and the significant proportion of funding directed towards AI-enabled companies underscore this trend.

Key Trends and Insights

Generative AI and AI- and LLM-enabled companies continue to gain investor attention, particularly in health information management. Despite comprising only 40% of the venture ecosystem, AI-enabled companies received 56% of the venture capital in the sector. This trend highlights the critical role of AI in driving innovation and attracting significant investment in healthcare.

“I believe that AI and large language models represent a new and unique level of revitalization for digital health.  The utility and functionality of many digital health devices can be transformed through artificial intelligence and large language models (LLMs). It’s this fundamental transformation that breathes life into what was a lackluster and ‘gadget-based’ initiative,” offers John Nosta, a global innovation thought leader who speaks to the “Age of Cognition” and how it impacts the future of medical care and technology.

The US and North American countries led digital health funding, while Europe remained the second-most funded region. Future reports will provide deeper insights into these trends with a detailed regional breakdown and analysis.

Mega-Deal Investments

Mega deals were crucial in the Digital health funding landscape during H1 2024. The period saw 26 mega deals (deal value ≥ $100 million) totaling $4.9 billion, accounting for 39% of the overall funding. This represents a 9% increase from H1 2023, which recorded 24 mega deals amounting to $4.5 billion. The average mega deal size reached its highest since 2019, at $191 million.

“The significant increase in mega deals and the robust M&A activity in H1 2024 highlight a maturing ecosystem rapidly consolidating and strategically repositioning itself,” said Galen Growth Founder and CEO Julien de Salsberry to Medika Life. “These insights are crucial for stakeholders to understand the evolving dynamics of the market and to make informed decisions that will drive future growth and innovation in the Digital health space.”

Notable Mega Deals:

• Xaira Therapeutics – $1,000 million (ARCH Venture Partners, Foresite Labs)
• Formation Bio – $375 million (Andreessen Horowitz)
• Freenome – $254 million (Roche)
• PharmEasy – $216 million (MEMG)
• Blackrock Neurotech – $214.3 million (Tether)

The geographical distribution of these mega deals highlights continued US dominance in attracting substantial investments. Of the 26 mega deals, 22 were secured by U.S.-founded companies, underscoring this nation’s engaged digital health ecosystem.

US Digital Health Funding by Investment Stage

The distribution of funding across various stages suggests a vibrant investment cadence supporting companies at different growth phases:

• Early-stage deals: 132 deals (32% of all deals)
• Series A: 88 deals
• Series B: 65 deals
• Series C: 42 deals
• Series D & Beyond: 35 deals
• Other Stages: 43 deals across various other stages.

Acquisitions and Sell-Offs

Mergers and acquisitions (M&A) activity in the Digital health sector remained robust in H1 2024, with 96 deals completed, a slight increase of 2% from H1 2023. This steady pace of M&A transactions demonstrates the industry’s ongoing consolidation and strategic repositioning.

• Noteworthy Transactions:
• Altaris Capital Partners acquired and delisted Sharecare for $518 million.
• Roche acquired the LumiraDx point-of-care technology platform for $295 million.
• Click Therapeutics acquired assets from the bankrupt Better Therapeutics.
• LabCorp acquired some assets from Invitae, a genetic testing company.

The elevated activity in M&As and asset acquisitions reflects the dynamic nature of the Digital health sector, with companies adapting to market conditions and consolidating resources.

Partnerships and Collaborations

The Digital health sector witnessed an almost unchanged collaborative environment during the first half of 2024, with 1,730 partnerships recorded, a slight 2% decrease from H1 2023. Healthcare providers emerged as the primary drivers of partnerships, forging 306 collaborations. This underscores the growing integration of digital solutions in traditional healthcare settings.

Newsworthy Collaborations:

• Nvidia – Nine partnerships focusing on health AI applications.
• Medical Diagnostics and Health Management Solutions – Key areas for venture-to-venture partnerships, indicating a trend towards leveraging complementary technologies and expertise.

Regional Funding Snapshots

United States: The U.S. maintained its dominant position, attracting $9.5 billion across 405 deals, up 14% year-over-year. The distribution of funding across various stages reveals a revived and focused ecosystem supporting companies along the growth cycle.

Europe: Despite a 10% decrease in funding to $1.52 billion across 158 deals, Europe remains the second most heavily funded region. The funding landscape showcases diverse investment stages, indicating a healthy and maturing ecosystem.

Asia Pacific: Asia Pacific attracted $1.17 billion across 118 deals, down 7% from H1 2023. Despite the decreased funding, the region remains strong in diagnostic technologies and patient-centric digital solutions.

Overview

The first half of 2024 has demonstrated the resilience and evolution of the digital health sector. With substantial investments and strategic collaborations driving innovation and growth, the $12.4 billion funding across 719 deals underscores renewed investor enthusiasm. The sector’s solid M&A landscape and increasing mega-deal activity convey a maturing ecosystem poised for continued integration into the mainstream health ecosystem.

As digital health ventures in the US, Europe, and Asia Pacific push the boundaries of health innovation, the groundwork laid during H1 2024 suggests a transformative future for the industry. Data from H1 2024 means that the digital health venture C-suite and investors can breathe a sigh of relief as valuations stabilize and deal flow continues.

This outlook calls for careful and informed decisions driven by proof points and facts, steering away from the speculative fervor of the COVID era.   The reflections of Galen Growth’s Julien de Salsberry reinforce that digital health – an expansive innovation field – that warrants payers, providers, and product innovators full attention:

“The Digital health sector’s resilience and sustained growth, as evidenced by the $12.4 billion investment in H1 2024, is a testament to the unwavering confidence of investors in the transformative potential of digital health technologies. This data underscores innovation’s critical role in enhancing healthcare delivery and outcomes globally.”

The post Digital Health Revitalized Returns to the Industry and Investment Sectors’ Priority Dashboard – Updated with Video Exclusive appeared first on Medika Life.

Media colleague Eric Wicklund, associate content manager and senior editor for Innovation, Technology, and Pharma for HealthLeaders, has penned a ViVE preview piece with a power grabber: “CAN VIVE 2024 SOLVE HEALTHCARE’S BIGGEST DILEMMAS?” That headline question isn’t rhetorical and doesn’t require an answer.  Resolution is not the responsibility of the ViVE co-organizers CHIME Health and HLTH.  ViVE puts the collaborative opportunity for health ecosystem players to face the challenges and opportunities in motion.

At the heart of these dilemmas is how payers, patients, product innovators, policymakers, and providers source and maximize health information.  No doubt everyone is jumping on the AI, ChatGPT, and GenAI bandwagon, excited that technology will solve the problems of system-wide fragmentation.  But like any tech shift or bolus of information, it all comes down to what innovation theorist John Nosta calls the “Introduction of the Cognitive Age.”

While some express trepidation that this technological revolution is the dawn of all fears that smart machines will replace health professionals, Nosta suggests that the “Cognitive Age leverages AI as a partner, augmenting and enhancing people’s ability to access and act with heightened intellectual and even technical (i.e., physical ability).

Once again, ViVE has teamed up with Galen Growth to provide insights on digital health in the US health systems. Galen Growth connects the importance of partnership and recent trends influencing not only the US health system – but also the close reader how health information and innovative technologies will transform the delivery, quality, and cost of patient care – including the influence on clinical evidence, decentralized clinical trials, and connective and home care.

Access the Galen Growth 2024 Digital Health Report here: LINK

ViVE is the space where all these conversations – the good, bad, and ugly – of the (predominately US) health ecosystem can be explored, and ideas can be identified and pursued.  VIVE partners with Galen Growth – the global digital health research and analytics specialist. It uses its proprietary database HealthTech AlphaTM to track more than 680 million data points, documenting 14,200 digital health ventures worldwide to produce its “Digital Health Innovation | 2024 Report.”

“In an era of rapid technological advancement, the 6,129 hospitals within 407 Health Systems1 across the United States are at the forefront of transforming healthcare delivery for diverse communities nationwide, notes Julien de Salaberry, a co-founder and CEO of Galen Growth. As the Digital Health landscape evolves, Health Systems play a pivotal role in bridging gaps, enhancing patient outcomes, and addressing persistent pain points.”

But the most significant challenges to accessing the potential of these new digital health technologies are not in ideas themselves – rather the innovators’ understanding of how the US health system works (or is dysfunctional); too often, the founders of these companies are unaware of how to engage leading hospital systems – find champions, integrate within the system, and address cost benefits and ongoing support issues.  Failure to navigate the complexity of countless decision-makers too often leads to ventures running out of capital and vanishing.  The Galen Growth Digital Health Innovation Report documents the roadway to potential success.

CTOs and CIOs within significant health systems are not immune to unprecedented challenges facing hospital economics and the cost of technology. Digital health leaders also recognize that they will hit a brick wall without clearly expressing ROI.  Health systems require measurable outcomes and evidence-based results from digital health partners, and to succeed mutually, they are creating incubators, venture groups and partnership models.

Health systems – hospitals, long-term care communities, and home care providers – will make giant leaps very shortly, drawing on information and technological changes.  The Galen Growth Report issued at ViVE on Monday, February 25^th, is the analysis and roadmap to understand better the economic priorities and investments driving these changes.

What is evident from the Galen Growth Digital Health Innovation Report is that while the total dollars of investment in digital health saw a steep decline from the exuberant investment during the height of the COVID pandemic, the category has gained greater importance among health systems seeking to make significant advances in how patient-care, work-flow processes, preventive care and reimbursement analyses play out.

AI, ChatGPT and GenAI investment is not aspirational – the focus is mainly practical and operational.  Those accessing the full report during ViVE will immediately gain valuable information to guide internal planning. Medika Life will update this article tomorrow with a link to the full report.

Will ViVE solve – as Eric Wicklund teases readers – the health system’s “biggest dilemmas?” Is that even it’s mission?  Likely not. But the people who attend ViVE will be looking for insights and information that can guide solutions. The Galen Growth “Digital Health Innovation | 2024 Report” will be one of the big takeaways that will spark conversation, ideas, and hopefully, as Eric reflects, some concrete solutions.

The post Galen Growth + ViVE 2024 Champion Digital Health Innovation as a Salve for an Ailing US Health Ecosystem appeared first on Medika Life.

The transformation of the digital health ecosystem is marked by consolidation, increased investor scrutiny, a shift in investment strategy, and the dramatic convergence of big tech and big health. Galen Growth has now released its 2023 Year-End Digital Health Global Key Trends Report. Medika Life was provided with an in-depth preview of this world-class authoritative data set and shares the report with readers at no cost.

Recognized globally by life science, health systems, and investors for its in-depth analysis, Galen Growth draws on its proprietary HealthTech Alpha platform, the world’s leading data, intelligence, and insights mining tool to compile its reports. Galen Growth tracks more than 680M data points and 14,500+ digital ventures.  

This comprehensive coverage is curated by Galen Growth’s specialized research team led by Sara Schmachtenberg, who leads a global group of analysts and industry experts in Asia, Europe and the United States. We appreciate Julien de Salaberry, CEO of Galen Growth, for making this report available to Medika Life and Lawrence Wurtz, the Galen Growth US lead, for his guidance. Special thanks to Ritesh Patel, who reminds us, “If it moves, digitize it!”

If you think digital health begins and ends with your smartphone, full stop! Digital health is vast and includes AI, ChatGPT, GenAI, health IT and more.  It harnesses the power of software as a prescription medical treatment for people with unmet medical needs. It is on the cutting-edge of health information technologies, driving smart wearables used to monitor patient vitals and report data back to provides. It ensure precision dosing of medicines.  It’s transforming women’s health and senior care. As its efficacy and safety parameters have morphed, the category demands the same degree of clinical commitment, regulatory oversight, and commercial savvy as any clinical product influencing life and health outcomes. The Galen Growth Trends Report studies 68 categories across 18 clusters. There is no comparative data that provides an overview of this magnitude.

While some “trend” reports cite dramatic numbers – largely pinpointing the dramatic drop in overall sector funding – the Galen Growth 2023 Trend Report offers a comprehensive analysis that guides analysts from industry and investment firms on where the money and where the successive waves of innovation are expected. Digital health as a category is maturing.  Gone are the investment dollars driven by unbridled exuberance and people licking their chops to enter “health’s tech boom.”  Get your hands on the 2023 Year-End Digital Health Global Key Trends Report to learn more. In the meantime, here is an analysis of the data and what it might mean for the category.

An Evolution in Digital Health Investment

2023 saw a tectonic shift in the digital health landscape as investors abandoned former highfliers and sought a more realistic perspective after the boundless enthusiasm influenced by COVID-19 in 2021. Even after more than a decade of maturity, the digital health sector has over 10,000 private companies showcasing varying degrees of innovation and potential. This evolution has led to increased commitments from pharmaceutical companies directing greater investment toward digital health innovation within their research efforts. Simultaneously, health systems are intensifying their focus on harnessing digital health innovation to enhance healthcare delivery and address capacity and productivity challenges.

Wallets seemed tighter in 2023.  The global averages revealed that only 31% of early-stage ventures, 34% of growth-stage ventures, and 53% of late-stage ventures raised funds in the last 18 months. But that’s also because many had already raised successful seed funds in the prior years. The remainder of the ecosystem was left to cut costs or rethink its business model.

A Complex Environment for Digital Health Ventures

Despite a thriving investment ecosystem, digital health faces headwinds. Recent data paints a mixed picture: fewer than 35% of digital health ventures secured funding in the past 18 months. This indicates an overall decline in investor support but a reorientation toward sub-sectors offering less risk and more customer upside. The pace of mergers and acquisitions (M&A) notably slowed, and initial public offerings (IPOs) and special purpose acquisition companies (SPACs) were few. Particularly in Europe, the absence of recorded IPOs underscores that investors retreated, waiting to see what the markets find valuable before reengaging. Less than a handful of years ago, there was significant money available to help scale up companies such as Pear Therapeutics (United States), Olive.ai (United States), and Babylon (United Kingdom). In the wake of their collapse, some investors remain in shock, and others are reflecting on the due diligence questions they should have pursued earlier.

The Rise of GenAI – Practical Need for Health Information Interpretation

GenAI (Generative AI) has emerged as one of the most exciting applications in the health sphere. Its prominence in biopharma and partnerships among health systems and innovators underscore its status as a central focus in 2023 and beyond.  The sector is shifting to address health system pain points – from taking the wash of “big data” found in electronic medical records and “scraping it” for clinical data that can be used to improve patient care – from confirmed diagnoses to better understanding chronic conditions to tracking for service provided requiring reimbursement codes and importantly providing healthcare staff summaries of patient status. 

On a topline, looking only at investor engagement and regulatory filing trends in the digital health domain would say the sector is in retreat. The Galen Growth data show its reorientation and why. The rise of GenAI is the “symptom.”  The disease might be responsible for the most significant part of the cost of care – health provider systems – recognize disruptive digital health technologies as the way to become more effective in operations and, most importantly, patient outcomes.

Increasing Partnerships and Technological Integration

The emergence of AI, ChatGPT, and GenAI has sparked partnerships with health systems that have been pivotal for digital health ventures despite the challenges posed by investor belt-tightening. In 2023, announcements of new partnerships surged 1.2 times from the previous year, with a 3% year-on-year increase in the total number of partnerships globally. Technological integration remains a cornerstone, with 39% of private digital health ventures leveraging Artificial Intelligence (AI) or Generative AI technologies to address this sector’s desire for greater efficiencies.

Big tech companies have long been sitting on the sidelines trying to understand better – to comprehend – how the multi-layered – fragmented – health system operates.  Behemoths like Amazon, Google, Microsoft, OpenAI and Google have all made big plays to partner, acquire and integrate health-specific AI platforms into their portfolios.  Health information – much of it handwritten and transcribed – defines “big data” – simply the ecosystem is awash in data.  GenAI might begin to make sense of the information chaos.

The application of AI is vastly different in health than tech and the giants will find the waters murky. In health-delivery settings, AI deals with sensitive patient data subject to strict privacy laws (e.g., HIPAA in the United States). Compliance with government health regulations is paramount, and data security raises legal concerns. There are ethical hurdles extending to issues like informed consent, patient autonomy, and the potential for AI to affect clinical decisions and treatment plans. Regardless, big tech has the cash to deploy and figure that out and they are eager to deploy in the health sector.

Biopharma All Aboard 

The research solutions cluster claimed 20% of the total funding in 2023.  Biopharma companies seek to “fail early” – to guard parents as we advance medicines in the research clinic and reduce the costs of creating new medicines.  They are embracing the idea and putting it into action, recognizing that information sorted at Lightspeed can better target drug discovery efforts and validate drug development teams’ trial design recommendations. 

Decentralized clinical trials have existed for some time. However, the COVID-19 era that became jet fuel for digital-health investment also paved the way for contract research organizations, life science companies, retail pharmacy chains, academic medical centers, and regulatory agencies to roll up their collaborative sleeves to create pathways and policies for the institutional use of this approach.

Companies that harness varied technologies and AI have sprung up to serve academic medicine and industry.  Long-awaited NGO groups such as the Decentralized Trials Research Alliance came into being, signaling increased opportunities for the sector. Research meetings such as SCOPE are seeing more and more digital health tech leaders step to the main stage.  The Galien Foundation, which once awarded its Nobel Prize like Prix Galien only to biopharma and medical device companies, has now included digital health and incubators, accelerators, and private equity entities among its categories.  Digital health is hard-wired into the ecosystem of science and medicine.

Like hospitals seeking to operate at heightened efficiency, the drug development sector recognizes that it needs to reach a much larger pool of patients – with a long-needed emphasis on diversity and broader geography – conveniently participating in clinical trials and ways to collect and sort added data.  Digital health is finding its seat around this table.  But at the same time, the seats are limited, and companies are choosing partners with caution and clinical data post the investment hysteria of 2022.

Galen Growth 2023 A Microscope and a Telescope

Digital health ventures addressing patients’ therapeutic care needs have a higher bar to leap to address environmental funding challenges.  It is now recognized that a Food and Drug Administration 510K approval is insufficient to secure market success.  Demonstrative proof points – the most critical biopharma sector, like clinical evidence, is essential. The need to show patient-care value – either as a solo therapy or in concert with medications – is needed. The Galen Growth Trends Report underscores that the ecosystem requires clinical and peer-reviewed “proof points” – not enthusiasm.

Investors are navigating stormy seas for improved returns in an extended higher cost of capital environment, grappling with a constrained investment value chain, reduced exits, scarce IPO opportunities, and current valuations.  Plus, let’s not forget, that private equity’s primary responsibility is to their limited partners – often institutions that place endowment funds with the firm expecting solid return on investments. Innovators and entrepreneurs have responded by pushing harder to provide the complex, fragmented health ecosystem with a range of digital health technologies that improve operations and patient outcomes – money and lives saved. 

The belt-tightening of investors has pushed out some who mistook category excitement for a quick pathway to returns. The past 18 months have reshaped the sector and catalyzed the transition from short-term, exit-oriented strategies toward sustainable venture-building approaches.

As the sector adapts and recalibrates, the Galen Growth 2023 Trends Report is a diagnostic of the past 18 months and a vital telescope to a potentially transformative future.

The post Digital Health Trends Revealed – Exuberance Gives Way to Savvy Investors appeared first on Medika Life.

********

In the first Medika Life analysis of the always insightful Galen Growth data offering insight into the state of affairs of digital health – from partnerships to its practical application to the category’s financial health – we described the global environment as promising yet filled with “trepidation”:

Trepidation. That one word describes the uncertain economic climate that gripped corporate and investment decision-makers. If we are to believe the headlines, wallets have tightened – almost closed – and investment in life science and digital health, as a result, has declined. That go-to conclusion takes a simple approach to a complex investment strategy for the digital health sector that has shown great resilience year-after-after.

Now, the word to describe this new report is “Potential.” There is incredible potential for digital health to find its way within the US health system in multiple ways – from AI to ChatGPT to digital therapeutics – it’s potential remains great. Its path arduous.

The special report prepared for ViVE2023 shifts from its usual global 30,000 feet analysis to a special meeting theme – digital health and the US health system – particularly on the provider side.  The data released during the first full day of ViVE as an analysis of hospital activities around digital health –where the rubber meets the road for many of these ventures – practice application of innovation. Galen Growth of their FINN Partners has mined the insights that entrepreneurs, their investors, health system chief information, and innovation officers need to study closely! 

The data are essential for ventures, incubators and accelerators to mine, determining whether the digital health category and the massive US health provider system are working together to evaluate their activities’ effectiveness and advance the nation’s wellbeing.

Galen Growth is among the world’s trusted digital health private market data, intel and insights firms for industry and investors. They remain the only specialist digital health innovation partner, able to bring together private market venture data, intel and insights platform giving its clients more applicable information than any other platform

In the US, some 417 Health Systems account for nearly 3,500 hospitals. More than 1,600 independent hospitals are the backbone of healthcare delivery in the country and – in addressing in-patient care — a significant contributor to health outcomes.  But, many of these institutions – particularly those in remote and rural communities – are ailing. They need a bolus infusion of health innovation to access patient data, reimbursement and basic diagnosis and treatment priorities.  Digital health – from EMRs to remote access technologies is part of the critical-care, system-wide treatment.

“More than 50% of the 417 US health systems are struggling financially, impacted by the rapidly rising labor cost and shrinking HCP workforce. Meanwhile, demand from consumers and patients continues to increase,” says Julien de Salaberry, founder and CEO of Galen Growth. “Health systems and hospitals have to make increasingly difficult decisions about their healthcare delivery capabilities and seek technology solutions to increase productivity and build capacity while retaining high standards of care,” he adds.

Unless otherwise stated, all data are exclusively sourced from the Galen Growth proprietary

database HealthTech AlphaTM – the leading global digital health intelligence and analytics on-demand platform. HealthTech Alpha now tracks more than 300 million data points and has coverage exceeding 13,000 digital health ventures across the globe.

Here are the core takeaways from the Galen Growth/FINN Partners – ViVE2023 Report – but read the entire report to mine its full value:

Partnerships

In 2022, 31% of all global partnerships with Digital Health ventures founded in the United States were built within the U.S. Health Systems and hospitals– more partnerships than any other industry vertical engaged with Digital Health.

Clinical Evidence

Among the ventures that are partnering with the U.S. Health Systems ventures focused on Research and Clinical Trials take the top strategic area spot, with 69% of the ventures having Evidence Signal > 40, indicating significant Clinical Evidence. Ventures in the strategic areas of Diagnosis and Treatment captured 40 and 36% shared, respectively.

Health Systems

Galen Growth has recorded more than 1,400 partnerships globally between Digital Health ventures and Health systems in the United States since 2012, with only 10 Health Systems recording a Digital Health portfolio larger than 15 ventures. More than 560 hospitals and Health Systems are active, but only the top 65 most active Health Systems are accountable for 50% of all recorded partnerships.

Oncology

Oncology takes the top position across the therapeutic areas, with more than 30% of U.S. Health System is partnering with ventures in this area—cardiovascular Diseases are in second place, with 20%. Looking across the top 25 most active Health Systems, the top 13 therapeutic areas were represented in more than half of the Digital Health portfolios.

Portfolio Size

Across the U.S., there is a 2.1x difference in the Digital Health portfolio size between the most active Health Systems and the most extensive Health Systems. While the largest Health Systems focus on infrastructure improvement and treatment partnerships, the most active systems are partnering more in diagnosis and have a higher share of digital tools for research (incl. clinical trials). Both groups have significant activity in Digital Health tools for Prevention and Wellness.

How is the digital health sector doing overall despite the energy and buzz?  According to today’s Galen Growth report, its most significant potential awaits to be fully realized. Julien de Salaberry summarizes:

“Since 2012, US health systems have disclosed more than 1,400 partnerships globally with digital health ventures, with only 10 Health Systems recording a digital health portfolio larger than 15 ventures. More than 560 hospitals and Health Systems are active, but only the top 65 most active Health Systems are accountable for 50% of all recorded partnerships.”

Once again, Galen Growth has given us a wealth of data to mine and contemplate. The potential for digital health – as a tool to accelerate access to life-saving information and care remains incredibly promising.

The post Galen Growth Issues Special ViVE2023 US Health System Digital Health Report appeared first on Medika Life.

The digital health sector has grown significantly during the past decade, primarily mobilized to address unmet health-system and care needs. From $2 billion invested in 2011, that figure morphed 28-fold to $56 billion in 2021. In the shadow of the COVID pandemic, unprecedented investment poured into digital health during this two-year window, accelerating the adoption of AI, remote patient monitoring, telehealth, digital therapeutics, wearables, VR and more.

DOWNLOAD THE FULL REPORT HERE

Galen Growth and FINN Partners have collaborated – for a second time – to offer the entrepreneurial invention and investment industry a wealth of data that can guide financing life-sustain – perhaps saving – enterprises.  With this detailed report, data is shared not as “one-off” ideas but as puzzle pieces assembled to provide actional insight into a dynamic and evolving digital innovation sector that offers the transformative power to find effective detours around health ecosystem fragmentation.

The Damocles Sword of Access and Outcomes

The two companies avoided hype and biases to create this analysis enabling investors or potential business partners to weigh subjective decisions alongside objective facts in recognizing that the fragmented health ecosystem centers around preserving the system itself are vital to helping product innovators and patients navigate the healthcare labyrinth. That economic return on investment is weighted along with patient experience and outcomes.  This is the Damocles sword that inventors and investors must always consider – reimbursement that ensures access to care and meaningful and measurable outcomes.

While digital health venture capital fell short of the exorbitant funding of 2021, it closed ahead of 2020 levels. A closer look at the year-on-year development of funding value by funding stages shows that funding in 2022 nearly maintained the level of 2021 for the Early Stage and Series A funding rounds. However, it lagged behind the 2021 values across late-stage enterprise funding.

Investors learned and began to put their due diligence into action – targeting their energies toward specific geographies, sectors and needs (e.g., clinical trials).  They looked for therapeutic categories receptive to digital health innovation.  Within the disease-specific investments, oncology saw the highest participation of investors (9%), followed by mental health (7%) and women’s health (7%).  C-Suite leaders and their funders will do well to study the report data and to determine next steps.

Just Facts – 250+ Million Data Points Analyzed

While other studies highlight “media grabbers” and numbers disconnected from insight into where the money is going — from the investment stage to disease states— The Global State of Digital Health connected more than 250 million critical analytic dots. This report will guide C-Suite leaders, business development and therapeutic area heads, private equity funds, and financial analysts to make savvy decisions that drive return on investment—whether the goals be financial or patient care.

After an extraordinary two-year pandemic funding spree, there are apparent shifts in how investors place their economic bets. In this year of geopolitical turmoil and uncertain financial performance, digital health remains vital to the future of the health economy and in addressing public health press points. However, the development stages in which funds are directed, therapeutic categories selected, provider systems that demand transformation, and the regions where innovators establish headquarters are now investment factors.

Bottomline, funding levels exceed the pre-pandemic values. Digital health ventures are busy – submitting more than double the number of regulatory filings in 2021 than before the COVID era. There is a dramatic increase in partnering activity over 2021. If dollars and Euros are the only indicators of energy and commitment, it is easy to see why hand-wringing news stories prevail. Look at all the metrics that determine a vibrant sector.

In combining investment, regulatory filings for new product introductions, and partnerships, it is apparent that 2022 has been a formative period. Investors and innovators are putting in place the processes and systems – the people and science – that drive adoption and market traction. Investors are no longer looking at the sector as monolithic.

Putting the Right People and Processes on the Innovation Bus

If 2021 was the year of exuberance, 2022 was, as Jim Collins, author of the classic business bestseller “Good to Great,” dedicated to putting the right people – leaders and digital health sectors – on the bus. For example, medical diagnostics ventures had an exceptional year by representing 12 percent of regulatory filings of Digital Health ventures across the globe, taking the top spot for ventures with significant Clinical Evidence (Evidence Signal >40), and capturing the highest investment volume share (17%), with the total cluster funding value falling short of 2021 by 16 percent.

As the report suggests, 2022 is a turning point for digital health – a shift from Digital Health 1.0 to the 2.0 era, with Digital Health evolving into a more mature ecosystem. The recent data reaffirm that perspective and a fast-paced realignment occurring within the sector.

Looking at the past year, it is evident that investor mindsets matured in 2022, and lessons learned were applied. Obstacles – from regulatory hurdles to payer pushback – made incubators, accelerators and private equity groups much more selective in their investment and partnership decisions. They looked beyond “invention” to innovation – where the market seeks to embrace a new product and rally to Foreword its access within the health ecosystem.

The 2022 “Global State of Digital Health Report” does far more than examine monies invested in the broad digital health category — it offers a guide for decision-makers on how multiple data points translate into market shifts and how to pinpoint trends that provide predictive insight and best practices in investment strategies, across regions, Digital Health categories, therapeutic areas and technologies.

Decisions will be made based on this collaborative effort. This report offers a new perspective – the data this report provides – finding the balance between hype and hope to offer balanced optimism is a guide.

The post Digital Health Innovation Continues to Press Forward at Warp Speed appeared first on Medika Life.

The report will be available at HLTH and is available for download via this link.  This is the first in a series of reports to be released every quarter, the second of which will be released in January 2023 at the JP Morgan Healthcare Conference in San Francisco, CA.

Experts from the Galen Growth data and research team have been working side-by-side with the FINN Global Digital Health Group to chart the complex and often fragmented digital health landscape, emerging market trends, areas of growth, and innovation. This novel report goes beyond market ups and downs. It defines what therapeutic sectors are high priority, what digital health geographic hubs benefit most from the capital infusion, and at what stages of development equity funds prefer to engage and invest.

Report Provides Category Leaders with a Roadmap

“This first-of-its-kind ‘Global State of Digital Health Report’ does more than examine monies invested in the broad digital health category,” said Julien de Salaberry, CEO and co-founder of Galen Growth. “It offers the corporate, accelerator, and private equity decision-maker a roadmap for how multiple data points translate into market shifts and how to pinpoint trends that provide predictive insight and best practices in investment strategies, across regions, digital health categories, therapeutic areas, and technologies.”

While 2022 digital health venture capital has not matched the skyrocketing value of 2021, the closer look provided in the report reveals that capital infusion in 2022 exceeds 2021 values for the Early Stage and Series A funding rounds. It increasingly lagged in 2021 values across later funding stages.

HIGHLIGHTS:

• Early-stage venture funding remains strong and promises a healthy innovation pipeline, while the IPO market has stagnated, with 6 IPOs and 4 SPACs globally. M&A activity has maintained strength, with a dip of only 7% YOY.
• With only 27% of ventures having raised venture capital in the last 18 months, the remainder of the ecosystem could be facing a bumpy ride, pushing their C-Suite and investors to cut costs, focus on profitability before growth or rethink business models.
• A global analysis of 12,000+ digital health ventures reveals that just 17% have significant clinical strength. Though some therapeutic areas saw funding shrink by more than 30%, oncology maintained the position of the most invested therapeutic areas in Q1 – Q3 2022, and mental health held the second position.
• Among the top 5 most invested therapeutic areas, gastroenterology was the only one that saw an increase in funding (2%) from 2021 to 2022.
• More than 60% of the total venture funding value comes from North America. But on a regional level, the Middle East (Israel and the United Arab Emirates) set record highs of venture funding in Q2 2022. Europe maintains momentum throughout 2022 and has not experienced the quarter-on-quarter decrease in venture funding seen in North America. Regions with increased investment correspond to established regulatory, public health and payer systems that prioritize digital health use.

Not Simple “News Grabbers”

“In the ‘Global State of Digital Health Report, data are shared not as simple ‘news grabbers’ but as a whole dynamic picture of an evolving digital innovation sector that continues to offer transformative power to find effective detours around health ecosystem fragmentation and use the information to improve care and reduce overall system costs,” said Ritesh Patel, Senior Partner and Global Digital Health Lead at FINN Partners. “This first report lays the groundwork for future releases recapping the year-to-date in digital health and focus on global investment insights, categories, and therapeutics to accelerate long-needed change.”

“Suddenly cut off from ‘in-the-room’ contact, digital was the connective tissue between physicians with their ailing patients and pharma brands with consumers and payers,” notes Gil Bashe, Chair Global Health and Purpose, FINN Partners. “But enthusiasm – the rush to enter the digital health category – cannot triumph over strategy and long-term business planning. This report will help C-Suite decision-makers determine where the health innovation is headed and why.  Any road will do when you don’t know where you want to go.  But the system needs to know where it’s headed when it comes to sustaining people’s health.”

About Galen Growth

Founded in 2016, Galen Growth partners leading companies for their digital health market intel and insights needs. With comprehensive data, empirical research and expert insights, the company help global organizations reach the optimal solution for their business transformation, discover the latest trends in digital health and strengthen their innovative know-how. HealthTech Alpha, Galen Growth’s proprietary platform, is the world’s leading digital health private market platform, powering how leaders and corporations make digital health decisions.

Headquartered in Singapore, Galen Growth has offices in Basel (Switzerland), Boston and Chicago.

Please find us at galengrowth.com and follow us on Twitter at @galengrowth and https://www.linkedin.com/company/galen-growth/.

About FINN Partners, Inc.  

Founded in 2011 on the core principles of innovation and collaborative partnership, FINN Partners has grown from about $24 million in fees to almost $170 million in fees over ten years, becoming one of the fastest growing independent public relations agencies in the world. The full-service marketing and communications company’s record setting pace is a result of organic growth and integrating new companies and new people into the FINN world through a common philosophy. With more than 1,400 professionals across 33 offices, FINN provides clients with global access and capabilities in the Americas, Europe and Asia. FINN Partners clients are also supported through longstanding partner agencies and its membership in the PROI network of leading agencies around the world. Headquartered in New York, FINN has offices in: Atlanta, Bangalore, Beijing, Boston, Chicago, Delhi, Denver, Detroit, Dublin, Fort Lauderdale, Frankfurt, Guam, Hong Kong, Honolulu, Jerusalem, Kuala Lumpur, London, Los Angeles, Manila, Mumbai, Munich, Nashville, Orange County, Paris, Portland, San Diego, San Francisco, Seattle, Shanghai, Singapore, Vancouver and Washington D.C. Find us at finnpartners.com and follow us on Twitter and Instagram at @finnpartners.

Contacts:

FOR GALEN GROWTH:

Lawrence Wurtz, General Manager, North America
lawrence.wurtz@galengrowth.com  or info-usa@galengrowth

FOR FINN PARTNERS:

Celia Jones, Global Director, Marketing Communications
celia.jones@finnpartners.com 
+1 773 885 9781

The post First “Global State of Digital Health Report” Tapping into 200 Million Data Points Examines More Than 12,000 Digital Health Ventures Now Available appeared first on Medika Life.