Our investment in HealthMatch
Read about January Capital’s investment in HealthMatch, a Sydney based digital health company transforming the way patients connect to clinical trials. We are excited to be joining the HealthMatch journey as part of their A$18 million Series B financing round alongside Square Peg Capital and Tempus Partners. We look forward to working with Manuri and her team as they seek to reimagine the clinical trial recruitment process.
Even though we are an investment firm that aspires to partner with founders that are digitizing large, essential industries, it is not often we see >US$50 billion sectors that are still mostly manual and offline. It is even more rare that these industries will be truly global, with arguably the most exciting growth opportunities in the Asia-Pacific region.
The clinical trial market is an example of one such sector — it is an enormous market and a mission critical one. For a drug, device or treatment to receive regulatory approval, major bodies such as the Food and Drug Administration (FDA) require rigorous, empirical studies to understand the “risk/benefit” ratio, and to ensure specific questions about the efficacy and safety of such treatments are answered. Indeed, many of us have waited with bated breath this year as potential COVID-19 vaccines have accelerated through this cycle at record pace.
In many respects, pharmaceutical companies are no different from a sporting goods manufacturer like Nike. In the same way that Nike focuses its attention on research and development, manufacturing processes and marketing in order to produce the best shoe for a specific sport, the competitive advantage for pharmaceutical companies lies in their ability to conduct important early-stage research, work out manufacturing issues, and drive distribution through a sales and marketing engine.
Clinical trials are known to be expensive, complex, and have low success rates (it is estimated that only 10% of all drugs that start human clinical trials become approved by a major regulatory body). Today, up to 75% of clinical trials are outsourced to Contract Research Organizations (CROs), which operate clinical trials end-to-end on behalf of the trial sponsor. This includes outsourcing the recruitment component of the clinical trial.
The development process for new drugs can take up to 12 years from early phase research to commercialization. The various phases of clinical trials are the most time-consuming part of the process, lasting between 6–7 years. The FDA estimates that the average costs to run a single Phase I, Phase II or Phase III clinical trial across therapeutic areas is US$4.0 million, US$13.0 million, and US$20.0 million respectively in United States. Approximately 40% of these costs relate to patient recruitment which can be anywhere between US$2,000 and US$15,500 per patient depending on the trial.
A well-discussed major bottleneck for many clinical trials is effective patient recruitment. Research estimates that up to 80% of trials are eventually delayed or abandoned due to insufficient patients. Even if a trial does proceed, delays during the recruitment phase can have a material financial impact, costing between US$0.6 to US$8.0 million for each day that a trial is delayed. Given the critical importance of finding the right patients, one may expect a significant amount of innovation has occurred in this part of the clinical trial process.
As we understand it, this is not necessarily the case. Today, CROs continue to place an over-reliance on historic relationships with hospitals or other offline networks to recruit patients for specific trials. Because of the imperfect nature of this approach, patients are often unaware that certain clinical trials may exist and be a “fit” as an alternative path of treatment. Even for motivated patients who seek out trials directly, they face challenges in accessing comprehensive trial information and lack the medical knowledge to comb through complex trial-specific criteria.
Global clinical trial recruitment volume continues to grow at 9% per annum, with an estimated 75,000 trials operating annually. Traditionally, the majority of these trials have taken place in North America and Europe. However, over the past decade this geographic centricity has started to change, with the World Health Organization estimating there has been a 700% increase in clinical trials registered in the Asia Pacific (APAC) region, far outpacing growth in North America. This growth in APAC has been driven by a large treatment naïve patient population and a lower cost of conducting trials.
Accordingly, we believe that a company that can remove bottlenecks in the patient recruitment process could act as a material contributor to improving the efficiency of the entire clinical trial process, and become a mission critical partner for pharmaceutical companies and CROs. Knowing this, we are thrilled to be able to join HealthMatch’s journey.
The Product & Vision
The ultimate goal of HealthMatch is to solve the existing pain points in the trial recruitment process in order to provide patients with better access and improve the efficiency for trial sponsors.
To solve these pain points, HealthMatch is building a two-sided marketplace which matches patients who are motivated to apply to clinical trials with trial sponsors who are looking for qualified patients that match certain criteria.
HealthMatch collects medical information from patients and trial criteria from sponsors. This data is fed into HealthMatch’s proprietary platform, where it is structured and augmented, allowing patients to be matched with trials where they have a high chance of eligibility. HealthMatch’s platform means the company are able to do this matching in real-time and at scale, presenting clinical trials tailored to their medical profile.
HealthMatch’s approach ensures data collected from patients is up-to-date, which further improves patient’s chances of meeting trial criteria and strengthens their chance of gaining trial acceptance. This approach greatly eliminates redundancy in the selection process or the need for the clinical trial operator to “verify” patient eligibility once a potential match has been identified.
By applying machine learning and artificial intelligence to this clinical and patient data, HealthMatch is able to dramatically accelerate patient recruitment times. In addition, the offering is free to consumers and in line with current pricing practices today. The service results in a “win-win” for all market participants.
Like most marketplaces, HealthMatch’s platform greatly benefits from the scale and network effects. The platform has a flywheel effect in the sense that the more patients that use the platform, the greater the increase in the efficacy of patient placement due to more accurate decision-making.
HealthMatch was founded by Manuri Gunawardena after witnessing first-hand the challenges of patients looking to gain access to clinical trials during medical school.
Our team were fortunate enough to know Manuri even before she embarked on the journey of building HealthMatch. Originally from Brisbane, Manuri gained direct entry from high school to University of New South Wales (UNSW) for her Bachelor of Medical Studies/Doctor of Medicine (which is one of the most competitive medical programs in Australia). While at UNSW, Manuri went on to complete a number of research and intern roles at prestigious institutions globally.
Whilst working as a neurosurgery sub-intern at Johns Hopkins Hospital, Manuri found that luck and randomness played a huge part in whether patients were able to enrol in potentially lifesaving trials. She observed that patients lack access to trial information and medical knowledge to navigate complex trial criteria on their own. Physicians often lack the time to keep track of all available trails and rely on networks to stay updated, often missing out on suitable trials for their patients.
Having witnessed the inefficiencies in the clinical trial recruitment first-hand, Manuri decided to press pause on her dream of becoming a neurosurgeon and start HealthMatch. After winning the first TechCrunch Startup Battlefield in Australia during 2017, Manuri went on to raise a Seed financing round from Tempus Partners and then both a Series A and Series B that has been led by Square Peg Capital.
Since founding HealthMatch, Manuri has been able to surround herself with a high caliber team of passionate individuals with diverse backgrounds that includes roles at Atlassian, Datadog, JP Morgan and BCG.
Progress so far and journey ahead
Given the marketplace nature of the platform the HealthMatch is developing, the team has spent the last two years building out depth and liquidity on the patient supply side of the marketplace and forging commercial relationships on the demand side with CROs and trial sponsors.
During 2020 HealthMatch has experienced strong growth with its user base growing from 8,000 in June to 80,000 at the start of December, representing a 10x uplift in patients using the service to access clinical trials in less than six months. This growth in patients using the platform has also translated to a growth in placements. HealthMatch is currently placing over 2,000 patients a month into clinical trials.
To date these trials have ranged from cancer to eczema treatments which we believe helps demonstrate the broad applicability of HealthMatch’s platform in placing patients into a wide range of clinical trials. Over the coming 12 months, HealthMatch plans to further expand the number of patients using the platform and being placed into clinical trials as well as building out further commercial relationships on the supply side of the platform.
In order to do so, HealthMatch has a number of exciting features on their product roadmap which are designed to further imbed themselves into existing clinical management ecosystem and is also looking to expand to further into Asia by setting up a presence in Singapore.
Although still early on its expansion and commercialisation journey, we believe HealthMatch can be a key driver of efficiency in the clinical trial recruitment process which in turn will bring life changing medicines and therapies to those who need them faster. We are thrilled to be part of their journey, supporting the company alongside Square Peg Capital and Tempus Partners amongst others.