AAL Investment Forum 2010 - Life Sciences and ICT from a VC point of view

1

Life Sciences and ICT from a VC point of view

Click to edit Master subtitle style

Nissim Darvish, MD, Odense Denmark
Ph.D.,
Senior document does not constitute an offer of securities. Such an offer will only be made by means of a Confidential Memorandum
This
Managing
Director to be furnished to investors at a later date. The manager may make changes to this document without notification.
© 2010 OrbiMed Advisors, LLC. All Rights Reserved. CONFIDENTIAL

The Communications Revolution
2

World Wide Web
NASA Illinois
(1993)

Cellular
Bell Labs
(1972)
201
Internet
ARPANET
0
(1970)

Wireless Telegraphy
Marconi Morse
(1896) Telephon (1873)
y © 2010 OrbiMed Advisors, LLC. All Rights Reserved. CONFIDENTIAL

Bell

e-Health-or the Marriage of ICT and Healthcare: The HICT
3

• e-health = Healthcare practice which is
supported by electronic
• processes and communication (Source:
Wikipedia)

HICT can be
• ICTBetter quality of carethe
can improve
translate
1.
speed and the
automation of the information management
2. More efficient use of scarce resources (1)
3. Better quality of life patients
(capturing, transmissionprofessionals
4. Better quality of life Healthcare
, processing and
storage) in a secure, scalable and efficient way.
5. Better Financials
1 Redundancy and inefficiency account for 25-40% of cost (eHealth taskforce report 2007-EC)


HCIT Drivers Du Jour
4

• The Patient/Consumer pressure will
dramatically change the delivery of healthcare

• The abundance of information and data will
have to be organized in a useful way for
decision support for medical staff and
patients

• Medical knowledge and medical decisions
have to be available in primary care/home
settings and at the point of care

• Integrated care with the emphasis on
systems of care ex. Kaiser, in the US and
Torbay in the UK to compete with other
Integrated care givers

• The need for increasing healthcare provider
efficiency and reducing cost


HCIT-Basket of applications
5

Asset Disease
Management Management

Monitoring E-Pharma
HCIT

Patient Medical
Records Equipment


Entrepreneurs – Venture Capital
6

Entrepreneurs create and build value based on opportunity and personal
motivation to innovate.

Venture capitalists provide
the currency for
entrepreneurs to build their
ideas into valuable
companies


Entrepreneurs – Venture Capital
7

VCs are RETURN SENSETIVE


VC Lifescience Investment 1995-2010 YTD
8

Series2 Series1
$Billion % from Total
10 VC 40
9 9.1
35
8 7.7
8
7.5 30
7
6.3 6.4 6.2 25
6 5.7
$Billion

$B

% LS
5.3 5.3
5 4.7 20
4 15
3.5 3.4
3.2
3
2.4 10
2 1.7
1 5

0 0
YTD

07
95

96

97

98

99

00

01

02

03

04

05

06

08

09

10
19

19

20

20

20
19

19

19

20

20

20

20

20

20

20

20
Year
Series2 1.7 2.4 3.2 3.5 4.7 7.5 5.7 5.3 5.3 6.3 6.4 7.7 9.1 8 6.2 3.4
Series1 24 23 23 18 9 8 15 26 28 29 28 29 30 28 34
30
Year

HCIT and Related Services Private Capital Raising
9

Only10% of the investments in LS go to HCIT

HCIT Market
10

• The healthcare information technology market is
estimated to be $53.8 billion by 2014, growing
at a CAGR of 16.1%. The market is expected to
grow mainly due to:
• electronic medical records,
• electronic health records
• computerized physician order entry system
The main driving element for
global healthcare information
• Non clinical systems.
technology market is the
changing government regulations
and government initiatives to
bring down the healthcare costs.


The 3P model for HCIT Investment
11

Patients Physicians/
The three fundamental
Practitioners
elements of healthcare
ICT investment:
practitioners, patients,
and processes. All three
are of equal importance
and should be Processes
prerequisites to funds
HCIT.

•Adapted from Cisco Internet Business Solutions Group


HCIT-Basket of applications
12

Asset Disease
Management Management

Monitoring E-Pharma
HCIT

Patient Medical
Records Equipment


Patient Records- Electronic Records
13


EU GPs using a computer during consultation, in % (EC
Study 2007) 14

100 Random
100 samples of
90 95 94 94 93 6,789 GPs in
92
29 countries
80 84
81
77 76
70 73 72 72
66 66 65
60 64
59 59
56 54
50
47
40
30 32
27
20 21 20
18
10 11
8 3
0
AT
EU27

RO
UK

DK

CZ
NO

BG
NL

BE

FR

ES

HU
PT

LU

SE

MT

PL
LT
EE

SK

DE

CY

EL

LV
IS
IT

IE
FI

SI
Source: empirica: ICT and eHealth use among GPs in Europe 2007, Bonn April 2008

% GPs Connected to Secondary Healthcare
(hospitals and/or specialist) 15

100

90

80

70

60

50

40

30

20

10

0
27

Y
FR

O
EE

ES

IE

LV

PL

SE

IS
LU

U
Z

T

AT

PT
BG

O
BE

K

E

SI

FI
EL

L

SK

K
LT
IT

N
C

M
C
D

D

U
H

R

N
EU


% Connectivity to Health Authorities
16

Health authorities
100

90

80
78
70

60 64

50
51
40

30
29
20
21
17 17 18 18
10 16 15
13 13 13 13 11
11 11 10 9
7 7 7 5 5 5 4 4 3 3 1
0
EU27+2
EU27

NO

RO

CY
DK

UK

DE
HU
BG
MT

CZ
NL
PT

AT
EE

ES

BE
FR

LU
SE

SK
LT

LV
PL

EL
IS

IE
IT

SI

FI



% Link to insurers (reimbursers)
17

Admin data with reimbursers routinely
100

90

80

70

60

50
48
40 45
43

30
26
20 23 21
19 19
10 15 15 15 14
13
10 8
8 5 5 5 4 4 3 3 3 3 2 2 1 1 0 0
0
NO

HU
UK

CY
EU27

EU27+2

LT

CZ

IT
RO

LU
DK

SE

EE

SK

DE

BE

ES
NL

AT

PT

MT
FI
BG
FR

IE

IS

LV
PL

SI

EL

For HCIT – Electronic Records to work ?
18

•
Infrastructure and Technical challenges
•
Secure/reliable wireless connection
•
Battery
•
Errorless sensors
•
Business model
•
Cost
•
Interoperability
•
Privacy and confidentiality
•
Workforce
•
Incentive: Doctors/patients/payers/hospitals
•
Government priorities are driving the change


HCIT Median Deal Valuation
19


Medical Equipment – Medical Devices
20


Wireless Medical Devices
21

ECG
Temp
Blood Pressure
Patient Web Viewer Weight
Glucose
Oxy meter
Swallowable pill

Cellula
r

Physician
DECT

Proprietar
y

Wireless
Monitoring Center LAN


In-stent Stenosis
22

• Self Monitoring Stent:
Detect restenosis
Measure Blood Pressure Continuously
Worldwide Coronary Stents Market

7.
5

5.
0

2.
5

Report #C245, "Worldwide Coronary Stents Market, 2008-2017," published May 2009 by MedMarket Yogesh Gianchandani and his team at the University of Michigan

.
Diligence © 2010 OrbiMed Advisors, LLC. All Rights Reserved. CONFIDENTIAL

Closed Loop Devices
23

• Automatic dosing control based upon measured
result
• Improved accuracy
• Benefits also to pharmaceutical trials

Applications
Asthma flow meter / inhaler
Diabetes glucose meter /injection devices
Cardiac Rhythm management

Key Healthcare Industry Segments
24

Medical Devices Pharma/Biotech HC Services and HCIT

% Volume ($) 18% 72% HC-Services 8%
1997-2010 E-Health 2%
Drivers for M&A – Rise of emerging – Expiring drug patents – Regional consolidation
markets; areas for – Increasing demand for – Huge demand for quality
growth and low cost products, services and healthcare and increased
manufacturing technology from healthcare spending
– Acquisition to extend emerging markets
core competencies – Global competition

Level of Moderately fragmented Highly concentrated with Highly fragmented with the
With the 50 largest over 50% of the market 50 largest companies
Consolidation
generating only 15% of total
Companies generating held by 15 multinational
market revenue
60% of total market companies
revenue


Ageing and ICT
26

• Social
• • 80+ population: doubles until 2050
• • 60+ population: from 20% in 1995 to 25% in 2020
• • 50+ population: 21% has severe vision/hearing/dexterity problems
• • Today 4 working for 1 retired, in 2050 only 2 working for 1 retired
• • Cost of pensions/health/long-term care: up by 4-8 % of GDP (2025)
• • Shortfall of care staff

Economy
• • Wealth and revenues in Europe of persons over 65 is over 3000 B€
• • Smart homes market will triple between 2005 and 2020
• • Early patient discharge by tele-health: reduced cost of 1,5 B€ p.a. (DE)
• • Tele-care technology at home: Empowerment of elderly and efficiency
• gains of 25% (UK)
• • Telecare market >5 B€/year by 2015 in Europe


Summary
27

The healthcare IT is dynamic growing sector
IT solutions can radically improve efficiency
and productivity
There are different segments within HCIT, each
one of this sector possess different value and
challenges

In the future, we expect to see:
– Greater levels of integration between devices
– An increasing presence of ‘application

28

Click to edit Master subtitle style

Odense Denmark

Nissim Darvish, MD,
Ph.D.,
Senior document does not constitute an offer of securities. Such an offer will only be made by means of a Confidential Memorandum
This
Managing
Director to be furnished to investors at a later date. The manager may make changes to this document without notification.

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