Innovating During COVID-19: Health Care Spotlight
September 29, 2020
By Elana Margulies-Snyderman
COVID-19 has accelerated preeminent trends in the health care industry. Some of them include:
- Rapid development of tests, vaccines and contact tracing technology
- Streamlining trials through the U.S. Food & Drug Administration’s (FDA) Emergency Use Authorization (EUA) to allow unapproved medical products or unapproved uses of approved medical products to be used in public health emergencies to diagnose, treat, or prevent serious or life-threatening diseases;
- Increased supply chain for personal protective equipment (PPE), masks and gloves, and more.
Christopher Mizer, CEO and President of Vivaris Capital, a private equity group based in San Diego and Ed Clay, President and Board Member of United Cancer Centers, Inc.’s (UCC’s) U.S.-based outpatient clinics for cancer patients (which provide both FDA-approved and investigational treatment options), discussed how the health care sector has innovated since the beginning of the pandemic.
Broadly speaking, many health care companies put their current initiatives on hold and looked for opportunities to support the applications of their core technologies to treat COVID-19.
“COVID-19 attacks every major organ system and health care companies took a deep dive on potential growth areas, like technology adoption to find cell therapy and anti-inflammatory options to treat the disease,” Mizer said.
With UCC, Clay added that COVID-19 fast-tracked some of the treatments they were working on for cancer patients including liquid and tumor biopsies and genetic testing.
“The market is catching up to the ideas we have had in the works,” he said. “COVID-19 fast-tracked some of the treatments we were working on and in many ways, it has been refreshing because we have opened up options to patients without having to wait many years.”
UCC will be the first institution to implement the FDA’s Right to Try legislation and other fast-tracking cutting edge treatments to patients, including taking patient genetics and matching them with drugs that passed a Phase 1 trial.
Artificial intelligence (AI) integration was one area of health care that became quite prominent during the pandemic.
“Many companies integrated AI to find new potential drugs and drugable targets, trial design and predictive modeling,” Mizer said.
Health care also innovated during COVID-19 through increased consumer/patient adaptation of telemedicine.
“Investments in telemedicine are up four times and existing players are expanding rapidly,” Mizer said. “In addition, patients, who are the consumers of it, have increasingly adopted this form of health care.”
Clay added: “One of the long-term implications of COVID-19 is we will see a lot more telemedicine.”
Given the robust innovations in health care, early-stage investors have continued to express interest in it.
“Early-stage funding for the first half of 2020 is comparable to 2019 and the investing pace has been maintained and could set a record,” Mizer said. “Health care companies have fundamentally profitable business models and strong balance sheets for almost all sectors. In addition, reasonable valuations for public companies drive continued investment from institutions and good exits to strategics.”
John Pennett, Partner-in-Charge of EisnerAmper’s Technology and Life Science practices noted “The capital markets activities, in particular public and private offerings and M&A transactions, have been robust throughout our practice in 2020.”
UCC, which is expected to launch its first outpatient clinic in Nashville in Q2 2021, is one start-up that is actively seeking early-stage funding. Vivaris Capital is raising capital through its structured product VICAN to launch UCC.
Mizer specified that biopharma continues to receive over half (55%) of all funding, followed by medical devices with 15-20% with in vitro diagnostics and home-based diagnostics growing rapidly and finally, followed by small molecule therapies with nucleic acid and protein based therapies.
Looking ahead, due to the innovation of health care during the current pandemic, the sector is expected to be better prepared for the next pandemic between spending more time analyzing potential “black swan” events that could upend the entire industry, faster adoption of technology including robotics, patient education, more flexible supply chain, and AI-assisted delivery of care and home-based care for telehealth and diagnostics.