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Investments into precision medicine companies is rising, but how much has it helped?
What healthcare will look like when the COVID pandemic is over is tough to say right now. What new technologies will emerge from this? What new data sets are created and how they are shared? Will healthcare shift to being more preventative? That will likely take years to sort out.
One interesting thing to look out for will be if we see a rise in precision health. This is healthcare that is tailored to each individual person, using their genes to figure out what treatments will work best for them. In a pandemic like COVID, knowing how to treat each person, and what drugs they will react best to, could have saved countless lives.
Precision health, however, didn't see the same type of rise in adoption as a space like telehealth, which a recent report speculated would encompass over 20 percent of all patient visits this year, representing $29.3 billion of medical services. Perhaps the difference is that telehealth services have been around for a long time, even if nobody was really using them before they were forced to; precision heath, on the other hand, is a relatively new space. The Human Genome Project was only completed in 2003, after all.
Still, the pandemic does seem to have increased investor interest in the space, which perhaps shows that they are betting on it to take on a bigger role if we were to go through another similar pandemic (knock on wood!).
In 2018, there was $565 million invested in 17 deals into startups using artificial intelligence to improve precision medicine.
In Q2 of this year, there was $5.1 billion invested in the healthtech space, representing 22 percent of all VC dollars invested during the quarter. Of that, $2.6 billion came from Series A investments into biopharma companies, compared to $2.3 billion in all of 2017. As such, valuations for these companies have increased by at least two-fold since the start of 2019.
There are also digital therapeutics, which compromises precision medicine. These therapeutics interventions are driven by software programs that use data to prevent, manage, or treat disorder and diseases. Investments in this category have grown an average of 40 percent year-over-year for each of the the last seven years; it reached $1 billion in 2018.
Another subset of precision medicine is predictive analytics, which uses data to predict what will happen to each patient, and to personalize their care based on those outcomes. This is a market that is expected to reach $7.8 billion by 2025.
Some of the biggest precision medicine companies include 23andMe, which has raised $786.1 million; Tempus, which has raised $620 million; Helix, which has raised $353 million; and PathAI, which has raised $90.2 million.
2020 investments into precision medicine
The largest deal so far this year into a precision medicine company is Grail, which focuses on understanding the human genome to provide medical breakthroughs in oncology. The company announced a $390 million Series D financing round in may from new investors including Public Sector Pension Investment Board and Canada Pension Plan Investment Board, as well as two undisclosed investors, along with existing backers including Illumina. This brought its total funding to more than $1.9 billion.
Other precision medicine companies that have raised funding this year include:
- Q Bio, an assessment of personal human health, came out of stealth mode with $40 million in Series B funding led by Andreessen Horowitz, bringing its total funding to $58 million.
- Color, a genetic testing firm, raised $75 million in a round that included T. Rowe Price and Viking Global Investors. The company has raised a total of $215 million.
- Syapse, a company using precision medicine to treat cancer, raised $30 million in Series D financing from existing investors Ascension Ventures, GE Ventures, Intermountain Healthcare Innovation Fund, Safeguard Scientifics, and Social Capital, as well as new investors Amgen Ventures, Medidata Solutions, Merck Global Health Innovation Fund, and Roche Venture Fund. This brings its total raised to $99.6 million.
- CancerIQ, a startup developing precision health technology for cancer, raised a $4.8 million Series A funding round led by HealthX Ventures.
- GNS Healthcare, a precision medicine AI company, extended its Series D funding round to $28 million, with an investment from Merck Global Health Innovation Fund, bringing its total capital raised to $66 million.
Be sure to check out the Healthcare in Politics event tomorrow (register for here!) where multiple panels of experts, policy makers and lawmakers who will be on hand to discuss topics related to healthcare policy and decision making, including the role of precision medicine in the pandemic response.
(Image source: hdfgroup.org)
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