➤ Growing demand for remote patient care and monitoring amid the pandemic is increasing the push toward digitalization in the healthcare industry, said Paul Grand, CEO of startup accelerator MedTech Innovator.
➤ In five years, most healthcare startups in MedTech's incubator programs will likely be focused on digital offerings.
➤ An increasingly virtual work environment is encouraging investors to look beyond national and regional borders for attractive opportunities.
Los Angeles-based MedTech Innovator is a nonprofit startup accelerator that helps companies focused on innovative technologies in medical devices, digital health and diagnostics.
The organization hosts annual programs in Asia-Pacific and the U.S. and offers the chosen companies exposure to extensive investor networks and consultations with top industry leaders, among other things. Johnson & Johnson is a founding sponsor of the U.S. program and sponsored the Asia program in 2020. J&J has also partnered with companies chosen by the MedTech Innovator.
In 2020, MedTech's program in Asia-Pacific attracted 170 applicants, and 20 were selected.
MedTech Innovator CEO Paul Grand
Paul Grand, CEO of MedTech Innovator, recently spoke to S&P Global Market Intelligence on how the COVID-19 pandemic is affecting the development of medical technologies as well as healthcare investing. The following is an edited transcript of the interview.
S&P Global Market Intelligence: How is COVID-19 influencing the development of new medical devices and technologies?
Paul Grand: In the past, a lot of devices required setups as well as [patient] checkups in hospitals. Now the emphasis is on how we can enable remote care and reduce hospital visits, especially post-COVID-19. Some devices such as hearing aids are being shipped to patients' homes and the patients can set [devices] up themselves.
The data component has become a much bigger driver for devices and wearables post-COVID-19. The pandemic has boosted the need for devices to be connected and be capable of collecting data. Data on sleep, for instance, collected by wearables such as Fitbit or other devices, can be increasingly monitored and analyzed using artificial intelligence to give clinicians and caregivers more insight about patients' lifestyles and conditions. Such data should help with making better clinical decisions.
Surgical tools are changing, too. Even sponges can be equipped with radio-frequency identification, or RFID, technology so it's easier for surgeons to track the number of sponges used and therefore, a patient's blood loss during a procedure. RFID enables identification of products and devices by means of radio-frequency waves.
One company in our accelerator program, Osso VR, also attempts to train surgeons with virtual reality. Surgeons can practice in a realistic environment using Osso's tools and receive feedback on their performance.
A little more than half the healthcare startups in your accelerator program in Asia this year are focused on digitalization. How do you see that trend evolving?
I think in five years, 90% of the startups in our Asia program will focus on digital offerings. Digital has been growing year after year, and I expect that to continue in a post-COVID-19 era.
When we say digital healthcare products, we don't just mean software. It means products with digital components, and these could be implanted devices, diagnostic tools or wearables. It's hard to imagine something that does not have a digital component in the future.
As I mentioned earlier, even sponges can be used for digital data tracking. The angle at which an orthopedic surgeon is inserting a screw can also be captured digitally and analyzed, ensuring there are no misalignments that can cause problems later. One of the companies that presented to us a little over a year ago made knee implants with built-in sensors to detect inflammation.
I think, with very rare exceptions, almost everything will be digital at some point.
Can you give us some examples of companies selected under the Asia-Pacific accelerator program?
There is a company in the program this year, Healthy Networks, based in Tallinn, Estonia, that makes a device called LungPass, which is basically a Bluetooth stethoscope you can use either at home or in hospitals. We found this company interesting because it can detect patients whose asthma is likely to be exacerbated much before it is normally spotted. With the pandemic, the stethoscope can also be used to monitor patients who are recovering from COVID-19 and see how their lung functions are changing.
Another company in the program is Singapore-based Credo Diagnostics Biomedical, which focuses on developing rapid diagnoses of lung diseases: their rapid-test kit for COVID-19 received approval for emergency use in Singapore in April 2020.
Has the pandemic changed the investment process for venture capitalists?
With the pandemic, investors have to adapt to doing many activities virtually. In the past, some investors were less willing to invest in companies that were based too far away from their own locations. Now, investors are realizing they can have a very positive relationship with companies even when those companies are much further away.
I think we may see a continuing trend of investors relaxing restrictions on where they invest geographically compared to previously. I am even hearing talk of using drones to observe manufacturing facilities in far away locations.