mHealth Israel:Israeli Digital Health Overview
Levi Shapiro
Partner
Veritas Digital Health Fund
Healthcare Spending in the US
Health Spending in Era of Payment Reform
Fragmentation is GREAT for Startups
Obamacare States See Increase in Efficiency
Health IT Funding & Deals
Investment +987% since 2009; 91% YoY
Deals: Digital Health vs. Biotech / Pharma
Emphasis on Diagnosis, Monitoring, Protection
Frost& Sullivan, 2014
Confidential 10
• Mandatory EMRs for 22 years
• Israel leads in relevant technologies:• Sensors• Algorithms• Encrypted communications • Cloud• Personalized medicine• Chronic disease management tools• Inter-Operability IT
Can Israel Lead HIT Innovation?
Israeli Digital Health Startups = Limited Revenue
Source: Levi Shapiro / IVC, 2014
Funding for Israeli Digital Health Startups
Source: Levi Shapiro / IVC, 2014
# Israeli Digital Health Startups, 2005-2014
Source: Levi Shapiro / IVC, 2014
What Does This Mean for Startups?
14
Tip 1: Play Nice with Partners
Opternative: Online Eye Exam
Lead-gen tool to drive visits to local optometrists and opthomologists
Case Study
Raised $2 Million
Fifteen full time employees
Launched product in 2014
Company Highlights
People world-wide who receive an eye exam each year
2.4 BILLION
75 PERCENT
Savings when using Opternativeover an in-person exam
People world-wide need exams but cannot afford or access care
700 MILLIONBusiness Model
Tip 2: Quantify the Value Proposition (Pilots)
- Pilot program with Newton Wellesley Hospital- Collected and shared information that helped win NWH as reference customer- Validation from NWH enabled new client wins
EarlySense Uses signal-processing technology to provide a contact-free and early detection patient supervision system
Case Study
Raised $28 Million in funding
Sixty full time employees
Profitable from operations
Company Highlights
18 Contents are proprietary and confidential.
Tip 2: Quantify the Value Proposition (Savings)
Helps organizations and physicians actively manage contracts and reduce regulatory risk. A mobile app engages physicians to record work, while a back-end portal provides support across the organization
Ludi ensures hospitals manage physician-hospital agreements so the expectations of the agreement are fulfilled and regulatory risks are decreased
Case Study
Raised $1.1 Million in funding
Four full time employees
Company Highlights
Average law suit cost due to inadequate documentation of physician contracts
$19 MILLION
70 PERCENT
Organizations requiring physicians to log their time
Organizations using formal contracts for medical directorships
77 PERCENT
19 Contents are proprietary and confidential.
Tip 2: Quantify the Value Proposition (Efficiency)
Doctor’s offices can identify scheduled patients who are at-risk for not showing up to their appointments and intelligently schedule additional appointments
SmartScheduling Brings an airline load scheduling approach toward doctors visits
Case Study
Revenue positive
Chosen for athenahealth’s internal accelerator program
Utilized in over 30 physician offices
Company Highlights
Doctors currently overbook their schedules in an effort to balance no-show patients
1 IN 2
$19 MILLION
Reduced revenue per clinic due to patients missing appointments
Average no-show rate for outpatient clinics
20 PERCENT
Tip 3: Follow the Money- Pharma Struggles with Digital
Ann.
Date Target Acquiror CE Mark
FDA
Approval
Transaction
Value
LTM
Revenues
TEV / NTM
Revenue
%
Up-front
07/14/14 ~200 NA NA 100.0%
06/30/14 375 NA NA 100.0%
05/27/14 ~305 55 NA ~75.0%
04/02/14 320 80 NA 100.0%
12/04/13 193 49 NA 100.0%
05/23/13
Targeted Therapies Business Unit
200 48 3.5 100.0%
10/23/12 165 NA NA 84.8%
04/05/12
321 68 3.6 100.0%
03/19/12 314 30 10.0 84.1%
11/21/11 413 NA NA 81.8%
11/09/11
313 82 2.8 100.0%
07/27/11 293 NA NA 100.0%
07/07/11 452 65 7.0 100.0%
09/20/10 444 0 NA 43.6%
07/12/10 433 94 3.8 100.0%
06/16/10 335 54 5.0 100.0%
05/05/10
210 56 3.0 100.0%
12/16/09 785 100 NA 100.0%
11/09/09 489 117 NA 100.0%
10/26/09 200 NA NA 65.5%
09/28/09 267 100 1.9 100.0%
Mean: $340 $67 4.2x 91.8%
Median: $314 $65 3.5x 100.0%
Tip 4: Sell The DreamPre-FDA Approval M&A Transactions
Source: Capital IQ.(1) $40 million equity investment and has the option to acquire Spinal Modulation for up to $300 million plus certain revenue-based milestones following U.S. commercialization(2) Includes $150 million potential CVR upon FDA approval. Does not include $1,050 million of potential CVR payments in six years post-approval. Revenue multiples only reflect $150 million in upfront payment.
($Millions)
Post-FDA Approval M&A Transactions
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