Takeaways from Goldman Sachs’ Digital Health Conference VC Panel

Panelists: Zavain Dar, Partner, Lux Capital; David Kereiakes, Partner, Providence Ventures; Ashkan Afkhami, Partner, BCG Digital Ventures

Our very own David Kereiakes had the pleasure of joining a VC panel at Goldman Sachs’ recent Digital Health Conference. Here are some key takeaways from the panel:

• AI/ML applications. While artificial intelligence and machine learning were acknowledged as industry buzz words and sometimes misconstrued as value opportunities (rather than value-enabling tools) at some start-ups, they were broadly seen by the panel as very real tools for therapeutics companies to streamline their research and development efforts. On the services side of healthcare the panelists have seen less real innovation through AI/ML, but believe there could be opportunities to affect consumer behavior and increase transparency across the healthcare system.
• FDA supportive of innovation, but challenges remain. Panelists noted that investing in a company that has yet to gain FDA approval can add a lot of risk, especially if it doesn’t have a long capital runway and ability to pivot, but noted that the FDA approval process has become quicker due to more innovation-friendly policies. In addition to FDA approval, companies must also address reimbursement, integration into clinical workflow, and sustainable business models.
• Reasonable path to reimbursement is key. Even if a product has regulatory approval there is the question of monetization. Panelists look for innovation that provides a measurable benefit to the target user with a reasonable path to getting paid whether it be via payors, providers, or patients.
• Importance of cultivating consumer relationships. One challenge that all three panelists agreed upon is in building real relationships with consumers that are not normally seen by healthcare companies, and give large consumer focused tech companies like Apple and Amazon an advantage. Consumer/patient experience and trust have become incrementally important areas of focus as healthcare shifts to a more digital and data driven paradigm. For instance, direct-to-consumer or DTC companies have begun to disrupt various areas of the healthcare continuum that tend to be lacking in patient experience and/or affordability.