Win-win Investment Opportunities in Digital Health and IoT for Life Sciences Investors and Pharma Industry
Digital Health and IoT are attractive opportunities for Life Sciences Investors and Pharmaceutical companies. The emergence of Digital Health and IoT (Internet of Things) 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.
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 Digital 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 favorable valuation.
- 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 Digital Health and IoT 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 hospitalization and cost savings for healthcare providers. This translates into a persuasive real-world evidence-based value story that payers prefer.
- The 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.
- Digital Health and IoT per se are not core competencies 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 a multitude of diseases, and the trend is likely to continue. This, in turn, increases the likelihood of successful exit for investors, data and connected health companies.
BiopharmaVantage specializes in providing commercial due diligence, strategic advisory and related services to healthcare investors and their portfolio companies. If you would like to explore how we can assist, then please contact us.