Art of Healthcare in Basel…

What a remarkable time to have traveled to Switzerland and the United Kingdom. After a series of meetings with healthcare industry leaders in Switzerland and England last week, the trip put some of the raging healthcare policy debates into better context. Unfortunately, the current U.S. political situation was at times quite distracting with revelation upon revelation unfolding throughout the trip; but no less so than the debates raging around Brexit, bickering over tariffs, Europe’s own version of Russian meddling, and the “baby Trump balloon.” What a surprise to learn that the State Department had issued a travel advisory warning for Americans traveling in London of all places.

Mini Trump.jpeg

Often U.S. politicians opposed to the Affordable Care Act point to the “single payor system” in Europe which unfortunately ignores the fact that there is not one system in Europe and that while countries like Switzerland achieve universal coverage, they Continue reading "Art of Healthcare in Basel…"

Step on Through: Healthcare’s “Digital Doorway”

Much of the significant recent merger activity in the healthcare sector is focusing renewed attention on the role of the pharmacy and the continued “retailization” of healthcare. Last month Flare Capital announced an investment in Aspen Health which will enable pharmacists to practice to their fullest potential. Now we are excited to announce Flare’s newest portfolio company higi, a company which will further position the pharmacy and other retail settings as the “front door” to one’s healthcare journey.

Higi has built a robust national network of over 11,000 smart health stations (as well as a host of robust mobile applications), which are within five miles of nearly 80% of all Americans, and capture a wide array of biometric data including blood pressure, pulse, weight as well as survey and demographic data. They are located across 14 retail partners (pharmacies, supermarkets covering more than 50 banners) as well

higi.pdf
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Plus One – Flare Team Expands…

Investment partnerships make many decisions together – many are small and relatively inconsequently decisions while others are more profound and impactful. Together we will make dozens of investment decisions over the course of any given fund, but we will only make a few personnel decisions. So, with great anticipation, we are excited to announce that Sarah Sossong has joined Flare Capital Partner as a Principal.

For nearly two decades, Sarah has been in the middle of the transformation of healthcare, most recently as the Senior Director for the Center of Telehealth at Massachusetts General Hospital for the past six years, where she was in middle of launching several novel care delivery solutions. Previously, Sarah was managing a wide range of innovative healthcare technology projects at Kaiser Permanente for seven years. But it does not stop there: she is also super smart having graduated from Princeton University magna cum laude and Continue reading "Plus One – Flare Team Expands…"

A Pharmacist Working His Magic…

A staggering $453 billion will be spent on pharmaceutical products in 2018 in the United States per Statista analyst estimates. Ten years ago, that amount was $291 billion. With 326 million Americans, that is nearly $1,400 per capita. Into this marketplace enters Aspen Health, our most recent “semi-stealth” investment which is focused on enabling pharmacists to practice to their fullest potential.

Much has been made about the devastating opioid crisis, and appropriately so. What has come to light in this current raging debate has been greater scrutiny of the various pharmaceutical distribution channels and whether the role of the pharmacist can be expanded to play a more meaningful patient-centric role. The increased complexity of the mix of therapeutics as increasingly more of them move to biologics and specialty drugs (now 42% of pharma revenues) necessitates the need for competent clinical pharmacy practices.

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Aspen Health is founded by David Medvedeff

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Iora Health – Bird in Flight

Yesterday Iora Health announced the close of a $100 million growth financing. We are thrilled to be an investor in what is emerging to be the leading company in the value-based primary care space. Iora is focused on Medicare patients over 65 years of age, managing over two dozen practices nationally. The care model is incredibly compelling as it focuses on an array of both clinical and social relationships with the members. Typical care teams are comprised of a primary care provider, health coaches, behavioral health specialists, nurses, clinical team managers and operations assistants, all collaborating to care for the whole person. Iora Health’s patients experience a 40% decrease in hospitalizations and a 20% decrease in ER visits.

Arguably the US healthcare system is at a point of inflection. Yup. We have heard that many times before. But wait – this now feels different. CVS buying Aetna, Cigna combining with

Inflection Point JPEG.jpg
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Grim Reaper…

Do you know how many people died worldwide last year?

According to the Ecology Global Network, 55.3 million people died which, one might say, compares “favorably” to the 131.4 million who were born (~250 births every minute) globally. The causes of death, while numerous, provide a somewhat morbid roadmap as to where one might expect future innovation. Venture investors look for technologies that will have the greatest impact on the largest number of people (“big market syndome”). Dow Jones VentureSource reported that the two most active biotech sectors in 2017 were the immuno-system and blood categories, which together raised $5.3 billion.

In particular, biotech VCs have done a marvelous job over the last few decades backing entrepreneurs who are developing therapeutics to address many of the most prevalent diseases. And now here comes the healthcare technology sector (software and services), which saw $5.8 billion invested in

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Mortality Disease
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VCs Are Screwing Up Price of Australian Wool…

Against a backdrop of unprecedented global capital flows, three themes emerged in 2017 that underscored a fairly dramatic evolution of the venture capital model: (i) continued globalization of the venture industry, (ii) further concentration of capital with fewer firms, fewer portfolio companies and (iii) advent of novel cryptocurrencies. And I am pretty sure that all of this drove up the price of Australian wool by nearly 60% over the past two years.

This past year was a watershed for the US venture industry as it represented less than half of global venture capital activity for the first time ever. Notwithstanding that, it was another robust year with over $84.2 billion invested in 8,076 companies according to National Venture Capital Association (NVCA) data. While the number of companies was the lowest annual level in five years, the dollars invested was the highest amount in nearly 20 years. Quite clearly, investors are supporting

2017 VC
2017 Exit
2017 Exit
dry powder
Rev run rate
wool
Continue reading "VCs Are Screwing Up Price of Australian Wool…"

VCs Are Screwing Up Price of Australian Wool…

Against a backdrop of unprecedented global capital flows, three themes emerged in 2017 that underscored a fairly dramatic evolution of the venture capital model: (i) continued globalization of the venture industry, (ii) further concentration of capital with fewer firms, fewer portfolio companies and (iii) advent of novel cryptocurrencies. And I am pretty sure that all of this drove up the price of Australian wool by nearly 60% over the past two years.

This past year was a watershed for the US venture industry as it represented less than half of global venture capital activity for the first time ever. Notwithstanding that, it was another robust year with over $84.2 billion invested in 8,076 companies according to National Venture Capital Association (NVCA) data. While the number of companies was the lowest annual level in five years, the dollars invested was the highest amount in nearly 20 years. Quite clearly, investors are supporting

2017 VC
2017 Exit
2017 Exit
dry powder
Rev run rate
wool
Continue reading "VCs Are Screwing Up Price of Australian Wool…"

Tinder for Healthcare

This is likely not about what you think…

It has been just over a month since returning from the JP Morgan Healthcare conference and my shoes are still wet. San Francisco is an amazing city, but less so in torrential rain when you must scramble from hotel to hotel, eagerly looking for your next 30-minute meeting with someone you may never see again. Trying to return emails or look up the location of your next get-together while holding an umbrella, racing between traffic, is challenging at best. Swipe right…or was it left.

Yet we all go – and actually look forward to going, in large measure to gauge the pulse of the industry and to assess what are some of the most critical themes for the upcoming year. This year, in particular, JP Morgan was a “can’t miss” event given the recent extraordinary healthcare M&A activity and the high-water mark pace

2017-Funding-Report_Digital-Health-Funding_001-1200x752
themes.jpeg
Continue reading "Tinder for Healthcare"

Tinder for Healthcare

This is likely not about what you think…

It has been just over a month since returning from the JP Morgan Healthcare conference and my shoes are still wet. San Francisco is an amazing city, but less so in torrential rain when you must scramble from hotel to hotel, eagerly looking for your next 30-minute meeting with someone you may never see again. Trying to return emails or look up the location of your next get-together while holding an umbrella, racing between traffic, is challenging at best. Swipe right…or was it left.

Yet we all go – and actually look forward to going, in large measure to gauge the pulse of the industry and to assess what are some of the most critical themes for the upcoming year. This year, in particular, JP Morgan was a “can’t miss” event given the recent extraordinary healthcare M&A activity and the high-water mark pace

2017-Funding-Report_Digital-Health-Funding_001-1200x752
themes.jpeg
Continue reading "Tinder for Healthcare"

Ontario Healthcare Tech Scene, Hey

Two decades ago I would occasionally find myself in Ontario given the developing innovation corridor between Toronto and Waterloo, affectionately referred to as “Silicon Valley North.” Last week I visited again and saw the emergence of a strong healthcare tech ecosystem, leveraging historic strengths in telecom infrastructure and the recent (and significant) commitments to the artificial intelligence sector. Out of a coordinated series of university initiatives, Thomson Reuters recently reported that over $350 million had been invested in the AI sector over the past three years in Ontario, employing over 1,100 AI researchers alone. “Silicon Valley North” is the third most important AI cluster in the world according to Element AI. This past week, Salesforce said it would invest $2 billion in the Canadian tech sector.

My meetings were on the Canadian side of the Niagara Falls, which I had not visited since I could barely peer over

Niagara
Continue reading "Ontario Healthcare Tech Scene, Hey"

Ontario Healthcare Tech Scene, Hey

Two decades ago I would occasionally find myself in Ontario given the developing innovation corridor between Toronto and Waterloo, affectionately referred to as “Silicon Valley North.” Last week I visited again and saw the emergence of a strong healthcare tech ecosystem, leveraging historic strengths in telecom infrastructure and the recent (and significant) commitments to the artificial intelligence sector. Out of a coordinated series of university initiatives, Thomson Reuters recently reported that over $350 million had been invested in the AI sector over the past three years in Ontario, employing over 1,100 AI researchers alone. “Silicon Valley North” is the third most important AI cluster in the world according to Element AI. This past week, Salesforce said it would invest $2 billion in the Canadian tech sector.

My meetings were on the Canadian side of the Niagara Falls, which I had not visited since I could barely peer over

Niagara
Continue reading "Ontario Healthcare Tech Scene, Hey"

Rounding the Bend, Heading For Home…

The 3Q17 year-to-date funding data point to several important emerging themes and may clarify where the broader healthcare technology sector is heading. Through nine months the investment pace has been nothing short of robust with StartUp Health and Rock Health data tallying $9.0 billion and $4.7 billion, respectively, although there are signs of recent moderation ($2.5 billion was invested in 3Q17 according to StartUp Health, suggesting a more muted 4Q17 level).

More specifically, according to StartUp Health there are now three sub-sectors of the healthcare technology sector which have already attracted more than $1.0 billion of capital YTD (Big Data/Analytics ($1.3 billion), Personalized Health ($1.2 billion), Medical Device ($1.0 billion)), underscoring both the maturity and depth of these market opportunities. Notably, seed investment activity was 28% of the total deal count 2017 YTD, which is the lowest annual level since 2010, further suggesting

Health M&A
Mortality Disease
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3Q17: Turbulence Ahead at Cruising Altitude?

With Bitcoin blasting through the $7,800 per token ceiling last week (then promptly dropping $1,000 in last two days), Apple now worth $900 billion, and unemployment at 4.1%, it is a good time to look at 3Q17 funding data. The venture capital industry continued to power along in 3Q 2017 as 1,706 companies raised $21.5 billion. While a slight decrease from the activity in 2Q 2017, the annualized pace suggests that 2017 will be one of the most active years on record for capital deployed. Notwithstanding the evidence that mutual funds and hedge funds have pulled back somewhat from their investment pace in 2014-2016, sovereign wealth funds and SoftBank’s recently upsized to $98 billion Vision Fund (closed in May 2017) have continued to drive overall investment activity.

3q17

In fact, the SoftBank impact is more dramatic than one might initially have thought. The largest investment in the quarter was the Vision

invest to exit
Time to exit no table (002)
Raised vs invested wo table (002)
Continue reading "3Q17: Turbulence Ahead at Cruising Altitude?"

3Q17: Turbulence Ahead at Cruising Altitude?

With Bitcoin blasting through the $7,800 per token ceiling last week (then promptly dropping $1,000 in last two days), Apple now worth $900 billion, and unemployment at 4.1%, it is a good time to look at 3Q17 funding data. The venture capital industry continued to power along in 3Q 2017 as 1,706 companies raised $21.5 billion. While a slight decrease from the activity in 2Q 2017, the annualized pace suggests that 2017 will be one of the most active years on record for capital deployed. Notwithstanding the evidence that mutual funds and hedge funds have pulled back somewhat from their investment pace in 2014-2016, sovereign wealth funds and Softbank’s recently upsized to $98 billion Vision Fund (closed in May 2017) have continued to drive overall investment activity.

3q17

In fact, the Softbank impact is more dramatic than one might initially have thought. The largest investment in the quarter was the Vision

invest to exit
Time to exit no table (002)
Raised vs invested wo table (002)
Continue reading "3Q17: Turbulence Ahead at Cruising Altitude?"

You Are Where You Live…

This will be complicated – and potenitally quite controversal. It is not at all meant to be a political commentary but where you live may directly impact your health. As the role of social determinants in one’s well-being are better measured and understood, there is the promise that they can be better managed. An analysis of the patchwork of differing state regulations, government priorities, economic conditions, and local norms and cultures shows fascinating patterns which provides commentaries on the state of health by state. Geography may be one of the most influential determinants of one’s health.

Undeniably the level of economic disperity across the country has increased dramatically, punctuated by the emergence of highly concentrated pockets of exceptional wealth. The Economic Development Group and its Distressed Communities Index (below) highlights the level of this fragmentation. Their analysis determined that three of every four new jobs were created in only 40%

Distressed
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Silly Rabbit…

Last month General Mills announced to Trix’s die-hard fans that it would return to artificial dyes and flavors, after two years and a lukewarm consumer reception to natural colorings from turmeric, strawberries and radishes. Turns out consumers far preferred Red #40, Yellow #6 and Blue #1 dyes.

Trix

For some time now, the healthcare industry has known that social determinants (items like food quality, residential address, access to education, etc) play a significant role in one’s health but the industry has struggled to properly assess, much less manage, such important factors. Coincident with this, my focus for some time has been about how close we are to actually developing tools to effectively accomplish this.

The premise is that multiplexing a set of disparate data sets will provide some startling  (and hopefully actionable) insights. For instance, one question we should be close to answering is “what is the quality of caloric consumption

Continue reading "Silly Rabbit…"

Silly Rabbit…

Last month General Mills announced to Trix’s die-hard fans that it would return to artificial dyes and flavors, after two years and a lukewarm consumer reception to natural colorings from turmeric, strawberries and radishes. Turns out consumers far preferred Red #40, Yellow #6 and Blue #1 dyes.

Trix

For some time now, the healthcare industry has known that social determinants (items like food quality, residential address, access to education, etc) play a significant role in one’s health but the industry has struggled to properly assess, much less manage, such important factors. Coincident with this, my focus for some time has been about how close we are to actually developing tools to effectively accomplish this.

The premise is that multiplexing a set of disparate data sets will provide some startling  (and hopefully actionable) insights. For instance, one question we should be close to answering is “what is the quality of caloric consumption Continue reading "Silly Rabbit…"

Spain is En Fuego…

When I arrived in Spain a few weeks ago the newspapers were bemoaning the extraordinary loss of global soccer star Neymar from Barcelona to Paris St.-Germain for a staggering $262 million transfer payment. Grown men were crying in the streets. A popular storefront in Ibiza captured the despair many felt, as they searched for meaning post-Neymar.

Ibiza 2017

Tragically, only days later, everyone was now crying in the streets after the horrific terrorist attacks in Barcelona. In addition to the obvious devastation, tourism is 14% of the Spanish economy and given problems elsewhere in European, Spaniards were expecting a bumper summer season of 38 million visitors.

Spain had been relatively insulated from Islamist terrorist attacks, although Barcelona which is in the Catalonia region of Spain has had a restive past with sporadic separatist violence. In three weeks, Catalonians are to vote in a referendum to determine if the region will separate

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Dramatic Capital Inflows Continue in 2Q17…Trouble Ahead?

In an environment of microscopic interest rates, it is particularly interesting to read the Preqin 2Q17 Quarterly Update which exhaustively tracks all things private equity and venture capital. At the end of June 2017 there were 1,998 funds in market raising a total of $676 billion – a staggering sum – indicative of global investors desperately looking for alpha. Admittedly, Softbank’s $100 billion Vision Fund skews the data somewhat but at the beginning of 2017, there were 1,834 managers raising $525 billion which were already all-time highs. In 2Q17 private equity funds raised nearly $121 billion across 206 funds; buyout funds accounted for $88 billion of the totals, which coincidentally was approximately how much was invested ($83 billion) in 1,001 buyout deals. This investment pace comfortably returns the private equity industry to levels not seen since the Great Recession nearly eight years ago. Amidst of all the distractions swirling around the Russia Probe
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