Mhealth Israel Meet Up Tel Aviv

Michael Berman

November 10, 2014

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My Background

MBA Cornell 1986

Scimed 1986-94– Head of Marketing

Boston Scientific Cardio-Vascular 1995-2000– President

– $1.4B in Revenue in 1999

Entrepreneur/Investor 2000-Present– Co-Founder 8 Start Up Medical Device Companies

– Outside Director and Investor in 5 Companies

– Currently on 11 Medical Device Company Boards and Venture Partner with RiverVest Ventures

– Collectively have raised $500 Million• Mainly VC Investors

• 2 Angel Deals

– $550 Million in Exits. 11 Companies still in Process.

We have come a long way

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We have come a long way

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Decline in Deaths from Cardiovascular Disease in Relation to Scientific Advances .

Nabel EG, Braunwald E. N Engl J Med 2012;366:54-63.

What will continue to drive this curve downward?

Drugs

Devices

Better Delivery of Care (Improved Systems)

Preventive Care

Lifestyle Improvements

Better use of sensors and data to improve all of the above

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Behavior Drives Health. Huh?

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NEJM, Sept, 20, 2007, 357:12

Ahaaaa….!

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NEJM, Sept, 20, 2007, 357:12

HealthCare IT

Can Better Use of Sensors, Systems and Data:– Improve healthcare outcomes?

– Improve patient experience?

– Better leverage current healthcare infrastructure; Improve efficiency?

– Reduce overall costs?

– Reduce costs of particular patient interactions?

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HealthCare IT

Will these products/services be Medical or Consumer?

Utilized by hospitals, doctors, patients, or consumers?

Will they need to prove better health outcomes or “just” have satisfied customers?

Huge implications on product design, clinical trial strategy, 3rd party reimbursement, distribution strategy, price point, exit strategy.

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Medicine in the Future

Elias Zerhouni– Personalized

– Predictive

– Participatory

– Pre-emptive

Addendum– Precision

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HealthCare ITWho Will Pay?

Payors

Hospitals/Providers

Patients

Consumers

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FDA vs. Medicare

FDA– Safe and Effective

Medicare– Reasonable and Necessary

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1. The technology must have final approval from the appropriate governmental regulatory bodies.

2. The scientific evidence must permit conclusions concerning the effect of the technology on health outcomes.The evidence should consist of well-designed and well-conducted investigations published in peer-reviewed journals. The evidence should demonstrate that the technology can measure or alter the physiological changes related to a disease, injury, illness, or condition. In addition, there should be evidence or a convincing argument based on established medical facts that such measurement or alteration affects health outcomes.Opinions and evaluations by national medical associations, consensus panels, or other technology evaluation bodies are evaluated according to the scientific quality of the supporting evidence and rationale.

3. The technology must improve the net health outcome.

4. The technology must be as beneficial as any established alternatives.

5. The improvement must be attainable outside the investigational settings.When used under the usual conditions of medical practice, the technology should be reasonably expected to satisfy TEC criteria #3 and #4.

The Blue Cross and Blue Shield Health Technology AssessmentEstablished 1985

The New Reality--2014

The Product Concept must be “Perfect” to get fully funded by VC’s– Big Market

– Proprietary

– Potential High Gross Margins

– Solve a big problem

– Low Technical Risk

– Acceptable Clinical Risk

– Low Financing Risk

– Low Regulatory Risk

– Low Reimbursement Risk

– Many Potential Acquirers

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Ideas

Great Ideas are Sparked by Contact with Reality and a Desire for Change

“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”– George Bernard Shaw

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Be Prepared to Find “Non-Traditional” Sources of Financing

Traditional– Angel Investors

– Venture Capital

– USA Public Markets

“Alternative” Sources– Corporate Strategic Investors

– Int’l VC’s

– Asia

– Government Direct/Indirect Support

– International Public Markets

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Life Science VC Funds Raised

Factors Cited as Having the Highest Impact on VC Investment

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Financing Risk

Has become a Paramount Risk, if not THE Paramount Risk, for most Emerging Companies

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Thank you

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