Securing financial backing is always a hot topic for startups, and never more so than today, when COVID-19 has upset the traditional landscape. That was the topic of “Medtech Innovation: The Post-COVID World of Innovation,” at the recent Transcatheter Cardiovascular Therapeutics (TCT) Connect. The annual symposium of the Cardiovascular Research Foundation (CRF), which was held virtually this year, is one of the most prominent in interventional cardiovascular medicine.
Co-moderators of this interactive and informative discussion included Fogarty’s Andrew Cleeland; Juan Granada, president and CEO of CRF; and Peter J Fitzgerald, MD, managing partner and co-founder of Triventures. The panel encompassed seasoned industry experts Josh Makower, MD, general partner of NEA; Jan Garfinkle, founder and managing partner of Arboretum Ventures; and Marc Galletti, managing director of Longitude Capital.
During the lively conversation, the group shared their thoughts on challenges and emerging opportunities in the field, as well as their views on how the pandemic has changed their approach to investing.
Potentially favorable areas of investment
Given the realities of the COVID environment, several areas have emerged as being especially promising for potential investments. These include:
- Therapies and devices that support remote patient monitoring and telehealth: While they will never replace in-person procedures, these platforms allow patients to receive similar levels of care without requiring the same physical presence requirements. Remote monitoring also facilitates more frequent check-ins, which can create a “virtual referral base.” When a provider sees something abnormal, now there’s a fact-driven reason to bring the patient in, which may generate another procedure down the road.
- Companies that provide great clinical care outside of hospitals: As dwindling elective procedures due to COVID have rendered the cost structure of a hospital untenable, investors are looking at companies that can drive treatment to the lowest-cost environment. That could mean to an office if it’s a procedure, or to the home for preventative medicine. They’re always looking for novel service models and technology that can push to the lowest cost center that would be able to provide the best care.
- First movers that can qualify for the CMS breakthrough device decision: Reimbursement is one of the hardest challenges faced by startups, thus the FDA’s recent move has been welcomed by potential investors as it guarantees a four-year window of reimbursement for companies that are likely to have their products on the market for a significant number of years.
- Novel technologies and procedures for cardiovascular disease: As we enter a more value-based healthcare reimbursement environment, investors will be looking for companies that can create a great outcome for the patient with a lower cost structure. Diagnostics has been a particularly exciting area as well as devices that solve significant unmet needs and impact a large population.
Challenges to investing
While there are many opportunities for companies with innovative devices and procedures to find investment dollars, there is no question that today’s conditions bring new challenges. Among those the panelists cited are the realities that:
- Clinical trials, especially larger ones, will be harder for patients to enroll in for the near- to medium-term, as consumers are hesitant to travel or even come to the hospital.
- People may avoid certain aesthetic solutions or elective procedures for the short- to medium-term, which means it’s more important than ever to have foundational clinical data and proof of concept data to give people confidence that it’s worth the perceived risk to undertake a new procedure or sign up for a new therapy.
- Due diligence has become harder; although the fundamentals surrounding rigorous due diligence haven’t changed, the process has become more challenging since investors can’t watch a procedure or meet with entrepreneurs in person. That can make decisions difficult given that a cornerstone of investing is trusting the management team and believing they can lead the company to a successful outcome.
Additional TCT Innovation Sessions Available on Demand
In addition to covering the important topic of securing investments, Andrew was also a co-moderator, alongside Peter and Juan, on the topical discussion on how startups are addressing the current environment in “Weathering the Storm: How Innovative Companies Are Meeting the Challenge.” The session featured leaders who represent the breadth of our industry, including Geoff Martha, CEO of Medtronic; Deborah Kilpatrick, co-CEO of Evidation Health and advisory board member of Fogarty’s Ferolyn Fellowship; and Daniel Wilson, executive vice president of Strategy, Corporate Development and Investor Relations at iRhythm Technologies.
The third and last panel took a deeper dive on the hot topic of telehealth, titled “Medtech Innovation: The Accelerating Emergence of Telehealth,” featuring the same moderators and two practicing physicians, Louis Cannon, MD, founder and senior managing director of Biostar Capital; and John Rumsfeld, MD, chief innovation officer of the American College of Cardiology.
These sessions will be summarized in future Fogarty newsletter. The innovation panel sessions can be viewed for free on the TCT Connect website until Thursday, December 3, 2020.
Innovation will always be on trend
Proving that disruptive solutions will always be rewarded, Andrew also supported
innovation by serving on the prestigious judging panel of TCT’s “Shark Tank” innovation competition. Amid close competition, it was won by On Site, co-founded by Dr. Achiau Ludomirsky, which has developed AI software for cardiac imaging.
The Shark Tank showcase is always a highlight that helps startups see others find success on the very path that they are currently pursuing.