24 June 2019
Last week we attended DTx Europe, a forum for the emerging Digital Therapeutics industry. After two days of insightful presentations, panel discussions and many caffeine-infused chats with startups, pharma companies and investors, our heads might still be spinning, but a few things have crystallised in our minds:
Funding need at the pre-revenue stage is likely to be higher than for the wider Digital Health sector
The need to increase the efficiency of healthcare provision globally puts pressure on DTx companies to offer outcome-based pricing for their products. This means longer lead times to revenue, higher upfront investment and a risk-return profile that sits in between Digital Health and Pharma. This would rule out some generalist and Tech and Digital Health VC investors with more rigid investment criteria seeking SaaS-type revenues as early as possible.
Interoperability is key to DTx product success.
Few DTx products would be successful in isolation. In order to gain traction with care providers, DTx needs to easily integrate with physician workflows and interfaces, as well as be able to seamlessly transmit and exchange data with various patient record management systems and other health apps that a consumer chooses to use. Just as with cocktails of conventional drugs, research will have to be done into combinations of multiple DTx products or combinations of molecular & digital treatments. Being able to generate and export clean (standardised) data sets would become increasingly important.
The most optimal path to commercial success for DTx companies is through partnering rather than building a whole set of Commercial capabilities in-house
Robust clinical evidence is the first step towards commercial success. DTx R&D requires a new approach to clinical trials, which many established clinical trial providers have not yet developed. The same applies to commercialisation, where new reimbursement, market access and channel strategies will be needed to convince complicated healthcare systems. Building commercial capabilities is expensive and takes time, and therefore, we anticipate the emergence of new specialised service providers focusing on clinical trials, reimbursement, market access and sales and marketing. An interesting example of a new channel to market is IQVIA's Appscript - a new app store with curated apps for GPs in the UK. Furthermore, partnering with pharma, med-tech and large payers is definitely a way forward to get DTx products in the hands of physicians and patients.
Overall, having met and worked with lots of health tech founders over the past years, we have been really impressed with the quality of the founding teams and developed products that we met at DTx. Our personal favourites are two digital-only therapeutics; Brain+ (www.brain-plus.com) from Denmark, a digital product for brain training, and Belgium based OnComfort (www.oncomfort.com) that is delivering pain and anxiety management via clinical hypnosis in virtual reality.
At Engelworks, we believe that Digital Therapeutics is one of the most exciting areas of Digital Health, and we are working with several players in the sector to support their growth in product, operations and commercials. If you would like to talk, please contact us on email@example.com. Always to meet for a coffee and talk Digiceuticals!