Success in the health and biotech space takes time but can be hugely rewarding. However, startups in the sector often need help with significant hurdles, dealing with long development cycles, regulators, massive capital requirements and a higher chance of failure.
Since the COVID-19 pandemic, a symbiotic relationship has emerged between Australian hospitals and tech innovators. This collaboration is breaking down barriers and increasing the likelihood of success, according to Dr Jeannie Joughin, Principal at OneVentures.
Dr Joughin knows just what it takes to get a healthtech product to market. Having spent decades in the healthcare and healthtech space, including as a scientist, working within the pharmaceutical sector, and in corporate development, her experience on the frontline of healthcare innovation provides a unique perspective on what the sector expects from healthtech and biotech founders navigating the ecosystem.
Starting collaborative conversations
Dr Joughin says that before the pandemic, it was not uncommon for biotech and healthtech startups to work in isolation – only approaching a hospital during the latter stages of development.
She explains that in an emerging trend, Australian hospitals have begun to proactively communicate their specific needs and challenges to startups. In doing so, hospitals are empowering entrepreneurs to develop more relevant solutions.
Dr Joughin suggests that this open dialogue enables tech innovators to align their products and services with the real needs of healthcare providers.
“There is a real shift – hospitals are providing advice to founders to work more collaboratively. They’re engaging with founders to deliver solutions. That’s going to be a win-win for founders and the hospitals,” she says.
Dr Joughin describes this collaboration between startups and hospitals as crucial to the growth of the sector and says it increases the chance of a startup’s success.
“By actively involving hospitals from the early stages, startups can better understand the challenges and requirements of healthcare providers. This collaborative approach ensures that innovations are technologically advanced and meet the healthcare ecosystem’s practical needs.
“Startups that actively seek partnerships and engage with key stakeholders are much more likely to succeed in the complex healthcare landscape,” she adds.
According to Dr Joughin, a primary focus for hospitals is the efficient delivery of remote care, allowing patients to receive treatment and care at home. This approach frees up hospital beds and enhances the overall patient experience. She says Australian hospitals are actively seeking technologies that can help them to facilitate this shift. Startups working on telemedicine, remote monitoring, and digital health platforms are finding strong support in this environment.
“A major driver for hospitals is getting patients out of the hospital into the home and improving all of the support systems around them,” she says. “So, a founder or a startup who’s looking at this type of tech can speak to people to find out what they need and then bolt that into their ecosystem. By doing that, they’ll have a much more successful outcome. They’ll have a purchaser, for example, and they’ll know what they’re developing it for.”
Navigating the ecosystem
With her extensive experience across all sides of the healthtech innovation process, Dr Joughin’s advice to startup founders seeking investors is straightforward – do your homework! Being first-in-class or best-in-class is essential.
She says it’s surprising how many startups approach her with existing solutions in the marketplace. To increase the likelihood of investment, founders should strive to be pioneers in their field or ensure their product surpasses existing offerings.
“You’ve got to provide a solution to an unmet need, not just develop a great idea,” Dr Joughin explains, and then stresses it’s essential that founders ‘think global’. With Australia making up only one per cent of the healthtech market, startups must assess their potential to compete internationally.
Build your pipeline
As a Principal at OneVentures, Dr Joughin is pivotal in facilitating the venture capital firm’s healthcare investments via Healthcare Fund III.
“Our sweet spot would be companies that have developed their technology, where they have some data that we can review. Proof of concept doesn’t have to be clinical. It depends on the product and the therapeutic area. We’re not pre-seed, we’re not seed, we’re not angels. We’re Series A or B onwards investors,” she clarifies.
Dr Joughin says that while proof of concept is valuable for Heathcare Fund III, revenue generation and how the healthtech can be scaled may be crucial for securing an investment from one of the other OneVentures funds.
“OneVentures started Fund III in partnership with the Commonwealth’s Biomedical Translational Fund in 2016, and it’s a long-term fund. It’s a ten-year fund – that’s important for Pharma. You know that it takes at least 10 to 15 years to get a product to market, and only one in ten makes it. And it costs about $2.6 billion to get a product to market on average. So, we have a diversified portfolio for that reason.”
She says startups, particularly in diagnostics and therapeutics, approaching OneVentures should focus on building a diverse and scalable product pipeline that demonstrates a clear path to profitability.
“You’ve got to have an eye to that bigger picture. It’s important to realise commercialisation capability and plan for success. Two of our portfolio companies, Vaxxas and BiVACOR are perfect examples. Exciting technologies with great potential and a good understanding of the pricing, reimbursement and future value of their products in market.”
Diversify your investment sources
Dr Joughin encourages founders to explore various sources of investment to ensure their financial stability and flexibility.
“Putting all your eggs in one basket is not necessarily a great idea,” she explains. Potential investors can come from partnerships with hospitals and pharmaceutical giants and collaborations with insurance companies.
“It’s not just VCs like OneVentures who can support product development. Grants from local and global foundations and governments can play a role. Hospitals are natural acquirers of technology as are the insurance companies and they can partner in advance of an acquisition. There are many ways to get money and advance technology for high unmet needs,” she adds.
Undoubtedly, the increased collaboration between Australian hospitals and tech innovators has created a fertile ground for the post-COVID biotech boom. An emphasis on relevance and patient-centred solutions is propelling the sector’s growth. With increased investment opportunities and a global mindset, Australian startups can significantly contribute to the biotech industry on the world stage. And OneVentures is there to help facilitate the move.
This article is brought to you by Startup Daily in partnership with OneVentures.