Why We Invested in Virtonomy
Virtonomy, the platform for in silico medical device development using digital twins.
Company Background
Virtonomy is a developer of simulation software that can generate digital twins for the design, development and approval of medical devices. Virtonomy helps medical device manufacturers significantly reduce the time and cost associated with getting a new device to market by shifting testing from in vivo (experiments performed within a living organism) and in vitro (experiments performed within a lab) to in silico (experiment performed using computer modelling). Regulators around the world have recognised the potential of in silico testing to not only prevent post market failures, but also to reduce health inequalities in the current development process.
We are excited about Virtonomy as there is a clear market demand for a new way to approach medical device development and the leadership team clearly have an unfair advantage in their ability to deliver that change.
Virtonomy was co-founded by Dr Simon Sonntag and Wen-Yang Chu. Sonntag (CEO) studied mathematics and bioengineering before completing a PhD in Cardiovascular engineering. As an expert in the field of computational modelling and digitisation of clinical trials, Sonntag regularly lectures on the topic and is involved advising regulators, such as the Food and Drug Administration (FDA), on how to adopt virtual clinical trials. Chu (CTO) is an experienced computer scientist with over 10 years of experience in computer vision and measurement. He spent over 5 years as an AI engineer for Philips managing and mentoring large technical teams.
The medical device market
The global medical device market was valued at around $495 billion in 2022 and is expected to continue to grow to around $718 billion within the decade (1). This growth is driven by an ageing global population causing a rise in chronic diseases that will require diagnosis and treatment, coupled with advances in medicine increasing the proportion of the population that are suitable to undergo these procedures. Societal expectation of earlier and more personalised interventions is further driving demand for novel devices to replace the status quo.
However, to bring a novel device to market remains a long and expensive process with high pre and post market failure rates. In the 1970s, due to growing public demand for assurances over safety and effectiveness, regulators released requirements for device manufacturers to meet in order to release a new medical device. This regulatory burden has led to some devices requiring over €100 million and more than 10 years just to receive regulatory approval. The vast majority of that expense is spent on numerous expensive animal trials and risky human experiments without a strong guarantee of success. It is estimated that 75–80% of devices fail to ever get out of the development phase and reach the market.
Despite this regulatory hurdle, some approved devices still fall short of a complete safety and effectiveness profile. In 2022 alone, the FDA issued 60 medical device recalls for devices approved on the market. A device recall is a significant event for device manufacturers, first and foremost due to the possibility that patients could be injured or killed. A McKinsey study demonstrated that product recalls can cost a manufacturer up to $600 million, not to mention the associated damage to the brand equity and an estimated average 10% drop in the company’s stock price.
Covid has further compounded the risk in device development with the global disruption of supply chains. The cost of components has skyrocketed, and as a result, manufacturing costs are eating into the margins of device sales. Now more than ever, it is paramount to keep development costs as low as possible while maintaining a high degree of certainty that the device will be safe and effective.
Regulators are taking notice of this and are open to the ways in which technology can reduce the time and cost associated with development whilst increasing the burden of proof that novel devices truly are safe and effective for patients.
Virtonomy product and positioning
Virtonomy’s v-Patients platform is the ultimate end-to-end solution to redefine medical device development using in silico methodology. v-Patients gives developers everything they need from initial ideation, iterative development and all the way to automated regulatory reports and submissions.
Currently, the development process can be broken down into roughly three phases over a long and expensive iteration loop. During the first phase, an idea is turned into a prototype in isolation of the clinical context that it will be used. Secondly, the prototype undergoes bench testing for components and materials again in isolation. It is only by the third phase that the product is tested in a cohort of animals and then a smaller cohort of humans to measure how it interacts with the physiology of the body. It may only be at this stage that any simple design nuances, which could lead to a catastrophic failure, may be detected and the whole cycle must start again.
Digital twins, computational simulations of real physiology and anatomy, can completely disrupt this paradigm. v-Patients allows developers to deploy prototypes directly into digital twins then modify, test and iterate in hours rather than months and years at a fraction of the cost. Bringing the interaction with human physiology and anatomy to the forefront of the design process means that a device can be modelled against a diverse patient population from the outset. A truly diverse (age, gender, ethnicity etc) cohort of virtual patients not only increases the accuracy of any efficacy and safety predictions but more importantly breaks down health inequalities for under-represented groups, a problem that has plagued medical research and innovation.
The Food and Drug Omnibus Reform Act (FDORA) signed by President Biden at the end of 2022 now mandates that device companies must submit a diversity action plan that is taken into consideration as part of the overall device approval process. Virtonomy’s v-Patients platform is positioned perfectly to help manufacturers satisfy this requirement.
The future
The FDA predicts that within the coming 5 years in silico data will make up the most significant proportion of evidence submitted inorder for a new device to gain approval. We believe that Virtonomy’s v-Patients platform will help lead the charge in the digitalisation of device development. A digital-first approach can truly increase the pace of innovation, and lower the barrier to entry for smaller start-ups, to bring exciting new products to market.
Virtonomy has the potential to completely revolutionise the incumbent clinical research office (CRO) market. v-Patients unlock the possibility of the CRO 2.0, where teams can collaborate with each other remotely, in real time and at scale within digital twins, replacing the need to use animal models for validation. There has been market demand for decentralised clinical trials within pharma and until now there hasn’t been a solution suited for the device development.
Above all, we are excited that Virtonomy will help break down health inequalities endemic within the current standard. If the dream of personalised medicine is to be achieved, there needs to be a fast and cost effective way for bespoke and novel devices to be designed and validated at scale. In our opinion, Virtonomy will unlock this huge opportunity and completely change the paradigm of device development.
Investors
We are happy to share the cap table with other mission-aligned investors: Dieter von Holtzbrinck Ventures, Bayern Kapital GmbH, Initiative for Industrial Innovators and Plug and Play Tech Center, as well as Accenture Ventures, Honeystone Ventures, N & V Capital, and the Springboard Health Angels!
Find the press release here.
