2016 Wilson Sonsini Medical Device Conference took place in San Francisco. While the tone of the conference was upbeat, there was also an acknowledgement of the challenges that medtech companies continue to face. New and innovative models are emerging to help navigate medtech companies through the challenging landscape.
Considerable discussion focused around monetary challenges. The conference started with a spotlight on venture capital with two new funds investing in early stage medical technology companies. Given the shrinking pool of investors interested in medtech companies, it was uplifting to hear from Sante Ventures and Apple Tree Partners about their focus on early stage medtech companies.
Breakout sessions focused on a range of topics that would help them steer a startup through building it and taking it from concept to commercialization, in a cost effective manner. A panel discussed emerging new methods of innovation to help the company through early prototypes and early first-in-man cases speedily. Obtaining reimbursement in the changing healthcare system is one of the most significant challenges and a panel addressed the issue of the reimbursement puzzle and ways to accelerate the adoption of new but unreimbursed medical devices. One panel focused on ways of creating win-win transactions with corporate investors, whereas another focused on new corporate deal models.
New methods of innovation increasingly include partnerships and collaborations with players outside the US. With growing interest from Japan in investing in US medtech companies, Japan has emerged as an important partners. A panel of experts discussed ways in which Japan and Silicon Valley startups are collaborating to finance and develop advanced medical technologies. Panels also discussed topics like Asian funding strategies and Israeli medtech revolution.
There were also discussions around more specific technologies and topics. Topics like off-label promotion and hiring and compensating CEOs were also discussed. A panel of CEOs with success in launching new products and building sales organizations, discussed evolving commercialization strategies required for product adoption. One panel focused specifically on the future of innovation in the area of percutaneous valve products that has recently revolutionized the heart valve market. Another panel discussed IPOs and corporate buyouts and in yet another panel the focus was on role of IP due diligence in corporate finance.
Before the corks came off the wine bottles, with venture capitalists serving as sommeliers, the semi finalists chosen for MedTech Innovator award were spotlighted. From 430 companies that presented their pitch to a panel of judges (a 30% increase from 2015), 20 semi finalists were selected to present a one minute pitch in a video. The audience heard their pitch in a 20 minute video. From these, four were selected to present longer pitchs and answer questions posed by a panel of judges. The audience then voted to select one of these four and the winner received a $25,000 award. By then it was time to uncork the wine and get better acquainted with those who poured the wine and who might pour much needed cash into medtech startups.
I will post a few different blogs on some of the panels, over the next few days. So stay tuned. Below are some highlights from venture capital spotlight discussion that started the morning.
Venture Capital Spotlight
The Conference opened with a spotlight on venture capital, in a panel moderated by David Cassak in conversation with Joe Cunningham from Sante Ventures and David McIntyre from Apple Tree Partners in discussion with David Cassak. Sante Ventures and Apple Tree Partners are two new funds that are actively investing in early stage medtech.
Sante Ventures go in typically at Series A round and are generally first institutional investor, said Cunningham. David McIntyre said that he does not find two areas appealing, digital health and diagnostics, more so because he does not have deep background in investing in digital health; but things are moving in that direction and they have looked at some wearables. Cunningham also said, “We have done more medtech than IT, and when we look at digital health, we look for profound changes”.
Emphasizing the importance of cost cutting in healthcare, Cunningham said, “if you go out on the street and ask people about the brand of hip or knee replacement they favor, they couldn’t tell you; in healthcare it is not so much about the brand, but the cost”.
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