August 14, 2018

An Insider Guide for Navigating the European Digital Health Investment Landscape

Hanna Phelan

The European Digital Health Investment report examines the healthcare investment landscape, including key insights and perspectives from leaders in investment to help set the scene for those looking to ignite the European digital health space or simply understand how it compares to our US counterparts.


A (Slowly) Rising Tide for Healthcare Angel, Seed & VC Deals in Europe

We’ve all heard and repeated the explosive US digital health investment metrics - a record $11.5 Billion was invested in 2017 in case you have somehow missed it. However, as previously flagged by our community, success stories are few and far between. So where does the European market stand? In short we’re moving slow in terms of investment and in terms of deal numbers, but it looks like we’re headed in the right direction.

Consider this, in 2017 70% of healthcare deals included at least one European investor. Biopharma and device Series A investments saw record levels with the influx of European investment in new technologies. The UK reaffirmed its venture leadership position, nearly tripling the value and volume of deals compared to the second largest country driving investments, Germany.

The UK and Germany have been home to some of the most significant European digital health movements, setting solid groundwork for those to follow and helping to make the environment increasingly more appealing for global investors and innovators. Is this a case of slow and steady wins the race?

What’s the Hold Up? Differing Factors in Europe and the US from Payors to Politics

There is no one size fits all blueprint when it comes to digital health investment - what works in one context is not a done deal for success in another. There are inevitable cultural and structural differences that have contributed to the differing pace of deals in the US and Europe.

For one let's take the differing influence of insurance models. The European system is heterogeneous and difficult to navigate in terms of scalability. While U.S. solutions are focused on fixing problems within its national payor structure, European innovation is able to focus on remedying the real issues. However, publicly funded health in Europe can also lead to slower procurement and traction. In European health systems such as Germany, healthcare is seen as a public good which makes navigating the payment models a different issue to that of the US.

One commonality however is certain - both environments are dealing with political unknowns, whether it is Brexit in Europe, or the future of the Affordable Care Act in the U.S. Understanding and acknowledging these factors and learning from the successes and failures of previous investments is key to the evolution of European digital health investment.

The Five European Investors to Keep on Your Radar & What We Can Learn from them Now

European investment capital and deal numbers have been humble - but the European investment scene is far from dormant or lacking in talent. In the report we take a look at five prominent European investment players in pharma and venture capital and extracted some key learnings that we can distil from their recent activity. One key theme that recurred across many of these significant European investors is the value placed on long term, and often multifaceted, relationships.

The Roche investment and significant acquisition of mySugr is a great example of this trend. Roche and Swiss MySugr announced their integration partnership in 2016 which allowed users that own Roche’s Accu-Chek Connect meter to automatically sync blood glucose data to mySugr. The relationship ignited when Roche invested in mySugr in 2014 and ultimately lead to its purchase in 2017. From these insights it looks like partnerships rather than one time investments are here to stay when it comes to European digital health investment.

So, What Now? Rubbing Shoulders with European Investors and Building an Expert Network

Earlier this month, HealthXL partnered with Imperial College Health Partners, Silicon Valley Bank and EIT Health to host a Global Investor Forum in London to share learnings around European investment trends. One of the attendees on the day Francesca Wuttke, investment director for MSD Global Health Innovation Fund, noted that “looking at things like logistics or supply chain management across industries can offer us insights on how to better manage patient care. Looking to the defense space, aspects of data privacy and security are directly applicable to data flow within the healthcare space.”

So, how can Europe continue to attract more of the ‘right’ capital? What can health systems do to incentivise the adoption of effective digital health solutions? And how will real world evidence impact the investment landscape? With these questions in mind HealthXL has engaged with its partners in the HealthXL community and beyond to develop the EIT Health Investor Network across Europe.

If you are interested in collaborating and contributing to this network of investors interested in influencing European healthcare, please reach to Shirlene Oh of ICHP or Caroline Saî of EIT via the details provided below. In the meantime, click here to read HealthXL’s European Healthcare Innovation & Investment report in full.

About HealthXL

HealthXL is a data-driven global digital health collaboration platform purpose-built to access and connect the brightest minds in healthcare leadership today. The company serves as a bridge, linking together the people, thinking and technology needed to drive innovation to address complex challenges facing the industry. Offering a combination of research, international gatherings and evidence-based viewpoints from the company’s select community of experts, members are able to directly access and contribute thought leadership insights, cultivate meaningful partnerships to drive change and actively participate in the most critical conversations and strategies that are shaping the future of modern health. The HealthXL community comprises healthcare, pharmaceutical and medical device industry visionaries, clinicians, investors, researchers and entrepreneurs. Member organizations revolutionizing the delivery of healthcare today include but are not limited to Abbott, Bayer, BMS, Cardinal, Cleveland Clinic, CSIRO, GE, GuideWell Innovations, IBM, Imperial College Health Partners, J&J, Merck, Partners Healthcare, Philips, Northwell Health, Novartis, Murdoch Children's Research Institute, ResMed and Roche.

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