Over recent years, biotechnology has uncovered new horizons in transforming patients’ lives. Insulin was the first biologic drug and was approved in 1982. Currently, the biotech market is valued at ~$100bn demonstrating explosive growth the past few decades. Now biotech has come to an era of gene therapy, personalised medicine, stem cell therapies and digital therapeutics. Tech as many point out is the 4th industrial revolution and has shown that has tremendous impact in our everyday lives. The convergence of tech and biotech has given rise to the emerging field of bioelectronics. Bioelectronics are electronic devices used as mediums to diagnose, monitor or treat diseases. Bioelectronics is not a completely new field; for example the first glucose monitoring device to control and measure blood sugar levels was approved in 2018. Another example is deep brain stimulation (DBS) used for the treatment of Parkinson’s disease (first approved in 2002). However, the future of bioelectronics lies in implantable technology: devices that can be orally administered or injected to the human body that can monitor and treat with high specificity, certain diseases.
From a market perspective implantable bioelectronics is still in its infancy. There are only 2 publicly listed companies, LivaNova (currently valued at $4.1bn) and Inspire Medical Systems (currently valued at $1.7bn). Both companies’ products are FDA approved devices intended for the treatment of sleep apnea. In addition, there has been only 1 M&A exit in the field. St. Jude Medical acquired Spinal Modulation for $175m in April, 2015. Spinal modulation’s product is Axium Neurostimulator System, an implantable device to treat patients with chronic pain.
CVRx’s has developed a neuromodulation device which is also FDA approved and is indicated for the treatment of heart failure. It is worth mentioning that the company has already raised more than $350m funding from notable VCs, including Action Potential Venture Capital. Action potential is an interesting case as it actively invests in bioelectronics start-ups such as SetPoint Medical (which develops a neuromodulation device for the treatment of Crohn’s disease and rheumatoid arthritis), NeuSpera (which develops an implantable device for the treatment of Urinary incontinence), and Presidio medical (currently in stealth mode).
A major investor in Action Potential is GlaxoSmithKline, which has also established a joint venture (Galvani Bioelectronics) with Verily Life Sciences (a Google subsidiary) that aims at developing bioelectronics for various applications. Other noteable investors in CVRx is J&J and New Enterprise Associates (~$20bn under management), which
Other FDA approved devices are AngelMed Guardian developed by Angel Medical Systems (noteable investor is St. Jude Medical) which indicated for acute coronary syndromes, Optimizer Smart developed by Impulse Dynamics indicated for heart failure and IM RefluxStop (from Implantica) that used for the treatment of acid reflux (CE marked).
All in all, except for LivaNova, Inspira Medical Systems and CVRx, all other bioelectronics products are still at the research or clinical development stage. An exhaustive list of the bioelectronics pipeline is shown in the table below.
It is interesting to see that there are several big pharma / medical devices corporates that have tapped into the bioelectronics market either through their venture arms or directly (e.g. Astellas, Boston Scientific, Santen, GlaxoSmithKline, MedTronic). There are two potential explanations for this trend. First, some traditional players are trying to break into a segment that may prove to have high return on investment in the long term. Certainly they do not want to miss the boat as they did with biotech. A second explanation is that some of these devices can be used to objectively measure end-points in clinical trials. This seems to be a more realistic benefit in the near future.
An additional conclusion from this market analysis is that many companies have received funding from angels or accelerators but not from VCs yet. This might be a signal that bioelectronics is still a segment at its very early stages. There is a lot of R&D to be done, especially from a safety perspective given that these devices are implantable and therefore, invasive. However, there are a few start-ups that have raised significant funding from noteable investors that seem to be with high upside potential.
All in all, is seems bioelectronics has a very promising future. But is it the next best thing in healthcare?