2020 launched a wave of innovation in digital medicine that we believe will continue to deliver meaningful benefits well beyond the pandemic. As a key provider of long-term capital to companies leading the way in the digital health space, Eurazeo is uniquely situated to play a strong role in the sector's digital transformation.
The accelerated rate of innovation and successful race to develop COVID-19 vaccines heightened public awareness of the importance of equity investment in medical research and healthcare advances.
In 2020, the biotech and digital health sectors particularly saw strong investment. Biotech IPOs continued to gain investor attention and venture capital fundraising in healthcare funds reached record-high levels. As of 2019, digital health represented a global market of approximately $350B; the first half of 2020 was characterized by record levels of venture funding, and by 2024 the global market is expected to increase to $600B. Moreover, the pandemic's impact has extended beyond the hunt for cures, launching key innovations in infectious diseases research and putting a spotlight on digital health from telemedicine to wearable healthcare technology.
Eurazeo has been an active investor in the healthcare sector for more than 15 years, and to date we have invested 1.2B€ in more than 70 businesses across a wide variety of verticals - including dozens of leading-edge digital diagnostics specialists and developers of new drugs targeting cancers, neurological disorders and rare diseases. We substantially boosted our commitment to the healthcare sector in December 2020, when we were chosen to manage the Nov Santé Actions Non Cotées, a 420 million€ fund for unlisted healthcare assets launched by the French Insurance Federation and the Caisse des Dépôts. The fund is committed to nurturing entrepreneurial projects in France’s healthcare sector and driving the industry’s digital transformation.
COVID-19 has accelerated the adoption of digital health – from telemedicine to drug trial technology to genomic analysis – creating avenues to invest in companies making meaningful impacts and supporting their accelerated growth, digitization and global expansion. Eurazeo is proud to support three companies currently in its portfolio: Doctolib (telemedicine), Withings (I.O.T), and SOPHiA GENETICS (genomic analysis).
We anticipate the continuation of a strong healthcare sector outlook over the next few years and are pleased with positive impact and pace of innovation during this critical time.
Telemedicine: One of the most prominent trends accelerated by COVID-19 is the advancement of telemedicine. The early days of the pandemic saw a dramatic surge in the use of Zoom and other digital telecommunications platforms in lieu of in-person doctor's exams. Although physicians initially resorted to virtual visits to curb the virus's spread, more streamlined payments, patient care and technical infrastructure developed over the past 12 months suggest this trend will outlast the pandemic.
In fact, patients and providers alike increasingly favor remote care, with 83% of 1,800 patients polled by Doctor.com saying they expect to keep using telemedicine once restrictions ease. When deciding to make a telemedicine appointment, 69% of respondents cited easy-to-use technology as the most important factor and 91% agree that telemedicine would help them adhere to appointments and manage prescriptions. Remote care is especially critical for individuals who are immunocompromised or at heightened risk; minimizing risk factors by avoiding heavily trafficked areas like hospitals can be essential to their continued wellbeing.
Telemedicine has limits; not everyone owns a smartphone or has access to the internet, and certain acute conditions may require in-person exams. Restrictions around telehealth were also relaxed in response to the pandemic, and have not yet obtained permanent status. Despite these unique circumstances, we believe the greater convenience and reduced cost of telemedicine will contribute to its establishment as a core pillar of healthcare even after the immediate urgency of the pandemic is resolved.
When COVID-19 set in, Eurazeo's portfolio company Doctolib, an online booking service for patients and providers, created a widely used free teleconsultation service and has since emerged as a driver of the digital health revolution in Europe with more than 35 million patients registered as of February 2021. Most recently, Doctolib launched its #VaccinationWhereWhen site, aimed at improving the accessibility and transparency of the vaccine rollout, as well as supporting the public’s ability to seamlessly schedule vaccination appointments. We believe Doctolib and companies like it are well positioned to continue to enable the digital shift towards a safer, more streamlined healthcare experience for patients and providers.
Clinical trial technology: Digital monitoring devices are a second segment driving innovation in healthcare. In the early months of the pandemic, COVID-19 interrupted hundreds of clinical trials as lockdowns caused test sites to close in order to prioritize the health of trial participants and staff. The lockdowns that occurred around the world had a profound impact on the clinical trial process – participants were not able to continue; trial protocols and data collection were adversely impacted; research deadlines and milestones were missed – and pharmaceutical companies and industry partners worked quickly to seek alternate approaches and considerations to traditional clinical trials. In some instances, this resulted in remote or hybrid trial situations, where applicable by trial type.
However, remote and hybrid trials are not feasible for all trial types. Trials requiring clinician-administered drugs (oncology, for example), have been unable to adopt remote monitoring or hybrid trial structures. Nevertheless, virtual trial efforts offer benefits and efficiencies that can help to streamline the research process, lower costs and bring new drugs to market quicker. Pharmaceutical companies continue to seek new and innovative ways to improve the data collection process to ensure the validity, reliability and efficacy of data from subjects in virtual trials.
That's where innovations in health technology and wearables have become increasingly relevant. A new generation of devices using sensors embedded in watches and other wearables enable trial subjects to record symptoms and vital signs and remotely relay the data to researchers – ensuring real-time access to data and a better patient experience.
Withings, a Eurazeo portfolio company, is a leader in this field. The company has designed several devices that capture medical-grade data, ensuring PIs and researchers have the data and information they need in a way that is patient-centered and facilitates an improved trial experience. Demand for Withings’ devices has continued to surge, and the company is pushing forward on designing even more versatile products – including its ScanWatch, which continuously monitors a patient’s vitals through built-in, medical-grade ECG and oximeter.
Genomic analysis: The swift pace of COVID-19 vaccine development would not have been possible without technology-driven analysis of the coronavirus genome. SOPHiA GENETICS is a Eurazeo portfolio company with a collaborative A.I. platform that has enabled biopharma companies to quickly map and analyze the genetic structure of pathogens. These efforts were critical to the timely formulation of a handful of successful vaccines for COVID-19. As the technology evolves, we expect SOPHiA GENETICS and other bioinformatics providers will be instrumental in the effort to combat many hard-to-treat diseases.
