Debiopharm Innovation Fund’s Tanja Dowe on investing in digital health start-ups and supporting them on their rollercoaster rides to improve patient outcomes
The weight of expectation hangs heavy over the digital health sector. Even before COVID-19 struck, shattering established societal and healthcare norms, much was expected from start-ups that could combine health and tech.
Now, with the pandemic’s acute phase beginning to recede, the rapid gains digital health start-ups were making pre-COVID have become ever more important as new and better ways are sought to improve patient outcomes in a hugely changed environment.
Someone with a keen eye for health, tech and investment trends is Tanja Dowe. A biochemical and microbiology engineer by training, she’s headed up the Debiopharm Innovation Fund since 2016, prior to which she spent 15 years as a strategy and transaction consultant in the life sciences.
Although a start-up’s long-term vision will always come from the entrepreneurs behind it, the challenges that founders face can come thick and fast as they navigate both financing options and operating risk.
“You can’t waiver and you can’t be unsure,” Tanja explains, “but things happen, and we all sometimes get lost in the everyday struggles.”
Nevertheless, there are always ways to bolster a company’s position if you can assess what makes them special and where they need more work.
“Over the years, working with such a variety of companies in med tech, pharma, diagnostics and digital health, what I learned was to quickly understand how to strengthen a company’s strengths and mitigate the risks it might face. There’s no such thing as an absolutely perfect business, but you can really develop any company,” she says.
Supporting start-ups with strategic guidance and long-term financial investment is at the core of the fund Tanja oversees – whether these emerging companies want to bring a completely new type of digital health product to market or convince traditional corporations to integrate smart data innovation into their operations.
The fund that Tanja leads is part of the independent Swiss biopharmaceutical company Debiopharm, which was established in 1979 to develop innovative therapies that target high unmet medical needs in oncology and bacterial infections. Its business model is to identify high-potential compounds for in-licensing, clinically demonstrate their safety and efficacy and then select large pharmaceutical commercialisation partners to maximise patient access globally.
The Debiopharm Innovation Fund has been operating since 2008, but with an initial focus on diagnostics, driven by the company’s desire to better understand personalised medicines and the companion diagnostics they rely on.
“In the early days the fund helped Debiopharm take a closer look at how patients are diagnosed before they are treated, because we can become better drug developers when we better understand that, and we also wanted to develop companion biomarkers for our drugs,” Tanja says. “But when I joined the fund, the goal given to me was to build a digital health portfolio.”
Considering why Debiopharm’s investment aims pivoted to digital health in the mid-2010s, Tanja says: “We are facing a huge disruption in the whole healthcare industry, both in terms of how patients are treated and how treatments are developed. The pharmaceutical industry has access to an amazing pool of technology, and at the same time we have a market pull from increasingly digital native population and push from soaring healthcare costs.”
Today Debiopharm has two main areas in which it invests: the digital transformation of pharmaceutical development and bringing better outcomes to patients through digital tools.
On the digital transformation side its investment portfolio features companies like Nova Discovery, a French in silico clinical trial company using AI and mechanistic modelling to predict the clinical benefits of new drugs in virtual clinical trials before human trials begin, and Swiss high performance genomics and clinical big data management platform firm BC Platforms. Another portfolio company is the Tel Aviv-based Nucleai, which is working to transform precision medicine through the application of AI-pathology and digital biomarkers, while the Miami-headquartered firm Carevive helps providers and pharma look at real-world patient experience in oncology enabling best treatment choices and new therapies.
These companies are working to make data smart. “As much as we like to talk about big data in healthcare, it doesn’t exist today because it’s really fragmented. These companies are changing that by aggregating data from different sources and analysing it,” Tanja says.
In terms of the patient journey, the Debiopharm Investment Fund’s interests include the French digital therapeutics firm Voluntis, a leader in the field of digital therapeutics, and Oncomfort from Belgium, whose digital sedation is being applied to pain and anxiety management. The Fund has also invested in, and now exited from, Finnish Kaiku Health, which provides personal digital interventions for cancer patients to help improve their outcomes and quality of life.
“We invest in these types of companies to learn from them, to see the newest technologies and be early adopters so that we are able to ride on the front line of this technology wave,” Tanja says. “This is what will make us better drug developers going forward.”
As companies like Nova Discovery and BC Platforms work to apply digital technology to pharma’s traditional drug development processes, one of the challenges that start-ups face in the sector is what Tanja terms pharma’s ‘pilot-itis’ affliction, whereby pilot after pilot is run but collaboration is slow to progress beyond that stage. One way to counteract that is to keep your eyes on the long-term goals.
She says: “The biggest way that we help start-ups is to bring long-term perspective and financing. As a partner we have to support the CEO and the management team to keep their eyes on the long-term goal. Without having a long-term view to financing companies, it’s hard because the roller coaster ride with start-up companies is not easy. You can’t waiver and you can’t be unsure. You have to be able to take that risk and then support the company.”
By successfully supporting its portfolio companies in this way Debiopharm’s strategy saw it go from zero to eight investments in digital health in its first four years, working with companies that combine tech and health, improve patient centricity in healthcare or tackle the drug development value chain. Pharma’s rocketing R&D costs are very much on Tanja’s mind as she helps guide digital health start-ups.
“We can’t develop drugs in a sustainable way for patients when our development costs are skyrocketing. It’s just not good enough and it’s not possible in the long term. Every other technology area in this world becomes cheaper as the time goes on, but the complexity of pharma and biology sees life science technologies just get more and more expensive. There’s something wrong there and we think there’s a lot we can do to improve this, for example, with data and AI.”
There is plenty of room to improve patient care too. In an era when digital health advances mean that pharmaceutical regulators are assessing – and approving – medical software, and digital tech is being passed for reimbursement by healthcare technology assessment bodies, it is clear that ideas about moving beyond-the-pill have reached to a new level.
As the industry journeys beyond its traditional treatment paradigms and ideas about ‘the drug’, there will be further new ways for patients to be treated in the future, Tanja says.
“At the moment, we give patients a pill and then there’s an outcome. But there are other ways that we can improve those outcomes, either by selecting the patient better or assisting the clinician making a decision on a particular patient’s profile to determine which treatment will cure them or give them the best outcomes. That type of things we can do already – for example, patient monitoring is bringing incredible results.”
One technology type that is changing what is possible in treating patients is the use of ‘digital companions’ or digital therapeutics. Application of sensor technologies or mobile apps in oncology to track how patients are doing and adjusting their treatments accordingly can extend overall survival by several months, not to talk about the possible improvements in quality of life.
The most advanced of digital therapeutics companies have gone public or received Series D financing in the hundreds of millions of dollars as their data-driven insights are clinically validated, but there are many more who have yet to finalise their strategic roadmaps for this rapidly growing sector.
Digital health is often overflowing with promise, but what are the key success factors for new start-ups? For Tanja, as she looks back on Debiopharm Investment Fund’s years of experience in the area, these come down to a handful of factors.
“Team, of course; every industry says the team is the most important thing and it really is, because it’s such a long term commitment. Then you have to have conviction and a great vision – you must believe in what you’re doing.”
Alongside this need to hold onto their beliefs, start-up founders need market understanding, in terms of where the market is today and where it will be tomorrow.
Tanja advises: “Start-ups benefit from understanding that they are not just bringing a new technology to an existing market, but that the market is also changing. If they are able to anticipate some of that structural change in healthcare, and provide solutions for that future, then they will certainly be in a stronger position.
“When we look at a start-up company, although there are all these ‘low-hanging fruits’ for digitalisation of, for example, hospital workflow processes that are still very important, we try to look one step beyond and go for more disruptive innovations.”
Although, as with any life science and technology investment fund, there will be a desire to bring financial returns, the key question for the Debiopharm Investment Fund is whether the start-ups it chooses to fund will enable the future of health and pharmaceutical development in a way that will be sustainable.
“I believe that the best commercial successes are those that bring long-term solutions, that bring sustainable solutions. Not something that works for a little while but doesn’t really take into consideration that it will only help those in wealthy countries in the top 10% of the world,” Tanja says.
As, more and more, the true potential of digital health is revealed, it brings with it a responsibility for the healthcare of the next generation, wherever they live and whatever their circumstances. Healthcare has its fair share of big, difficult problems and with digital technology many of them should be able to be solved.
The current climate in digital health can best be described as a race. The speed at which a technology start-up typically works means that these firms are continually pushing regulators for new guidance and systems. To their credit, the authorities have been accelerating their usual timeline. Amid this rapid regulatory and technological development, digital health start-ups can find they have gaps in their market understanding that an experienced pharma partner could help them fill.
Tanja says: “As a pharma company, we can give our portfolio companies a lot of insight into what challenges pharma is facing, especially with the continuous change in healthcare stakeholders. If a start-up’s customers are pharma companies, then we can really help them understand where a customer’s pain-points will be. They may even test drive or co-create their solutions with our pharma developers – we’re a friendly partner, helping to develop solutions that will sit even better with customer needs.”
That assistance encompasses regulatory insight, market access guidance and health economics knowledge, as well as understanding the huge shifts foreseen in the health payer sector. As Tanja notes: “Their role is probably under even a bigger disruption than the pharma industry role – everyone has a changing role.”
For her fund, which typically invests at a Series A stage, as start-ups bring their product to a proof-of-concept stage, what’s then also becoming increasingly important is how to turn those great ideas and the certain amount of traction they have into a good business. Today that requires clinical validation, but for those outside the pharma sector, designing clinical studies to deliver the proof needed for a product’s main claim is often really challenging. Debiopharm can give guidance for their portfolio companies also in this area.
With so many moving targets for digital start-ups, there has never been a better time for assistance from an investment partner that can marry traditional pharma know-how with an innovation mindset.
Early commercial stage, large pilots / early sales
Entry at Series A, follow to subsequent rounds
Novadiscovery, Nucleai, Carevive, Voluntis, Oncomfort, BC Platforms, and Kaiku Health (exited 2020)
Immunexpress, GenePOC, Biocartis, Agendia, Spinomix, Diagnoplex, OSE Immunotherapeutics, Neovacs, Eclosion
Portfolio companies have achieved 10 FDA clearances, 13 CE marks, 2 IPOs and 5 trade exits
Combination of tech and health, market access in healthcare, drug development value chain
Digital health in oncology and infectious diseases
Tanja Dowe is the CEO of Debiopharm Innovation Fund, the strategic investment arm of the Swiss pharmaceutical company Debiopharm. Former entrepreneur and strategy and transaction consultant, she invests in startups with disruptive technologies that transform the pharmaceutical industry.
As Debiopharm’s strategic corporate fund, the Debiopharm Innovation Fund invests in digital health, smart data, and innovative tech start-ups. Find out more about seeking digital health start-up funding.