Femtech represents significant growth opportunities for biotech companies, but is still under the radar for most investors. None-the-less, pioneering companies are emerging to address this sector’s many underserved needs.
Femtech represents significant growth opportunities for biotech companies, but is still under the radar for most investors. None-the-less, pioneering companies are emerging to address this sector’s many underserved needs.
This category includes health and medical products targeting women, as well as pharmaceutical therapies and diagnostic devices for diseases that disproportionately affect women, such as heart disease, depression and Alzheimer’s disease. Frost & Sullivan predicts the market will exceed $8 billion this year and reach $9 billion by 2024, even without including cancer or pharmaceutical solutions.
“If pharmaceuticals, diagnostics and digital tools are included, many say the market could reach $50 billion by 2025,” Christina Jenkins, venture partner with Portfolia’s FemTech and Active Aging and Longevity Funds, said while moderating Demy-Colton’s Virtual Salon Series, “Women’s Health Moves Mainstream: Rapid Growth Meets Underserved Market.”
Such growth is fueled by general dissatisfaction with healthcare, Jenkins explained.
“The adoption of tech-enabled solutions, more awareness of the field, greater understanding of the biological differences between men and women, and an increasing number of female venture capital investors…” are combining to increase interest and investment in femtech. “Although menstrual and pregnancy care are the most widely adopted areas, menopause has one of the largest growth opportunities,” Jenkins pointed out.
Despite high growth opportunties, attracting investors has been challenging for femtech companies.
For example, Surbhi Sarna, CEO of nVision Medical, developed a product that she said, “in 2011, sounded like fiction.” It enabled physicians to access the entire length of the Fallopian tubes, which previously were inaccessible.
“After several months of back-and-forth with a venture capital firm, it said ‘No,’” Sarna said. “I called my contact there and offered to share the risk: I would move home with my parents and not take a salary. That investor went to her company and asked to break her contract by investing herself. She was allowed to lead that investment and two other female investors joined her. Two months later, I had my first male investor.”
Boston Scientific acquired nVision Medical in 2018 for $275 million.
Likewise, Katherine Ryder, CEO of Maven Clinic, was told by two male investors, “If we invest in seed financing, no one will invest in your A round because nobody invests in women’s health.”
Ryder raised $2 million in ‘friends and family’ contributions and then raised seed financing in London.
“The stigma of women’s health investments isn’t as strong in Europe as in Silicon Valley,” she said.
She plans for Maven to remain private for the foreseeable future.
One of the challenges in attracting investors in the femtech sector has been an astounding lack of data.
“That points to the lack of infrastructure in women’s health,” said Mylene Yao, CEO and co-founder of Univfy Inc. “Introducing an innovative product isn’t sufficient.”
She noted that approximately 7 million couples face clinical infertility in the U.S., but there are only about 200,000 to 300,000 in vitro fertilization (IVF) treatments in the entire country each year.
“That accounts for about 150,000 women, so what’s happening to the rest?” she asked.
To find out, Univfy mapped the patient journey of thousands of women across several states who underwent IVF treatments. That map, combined with artificial intelligence, yields a scientifically-validated, personalized report to advise patients from diverse demographics about their likelihood of having a baby through IVF. The analysis includes such individual factors as ovarian reserve markers, embryo quality, body mass index, sperm count and chronological age.
“We bring science and transparency to the conversations between the provider and the patient. It’s not just (medical) counseling. There are financial and emotional effects, too,” Yao said.
The company also provides aggregated data and insights to providers to help them improve patient education and retention, and to investors.
“If investors don’t understand the middle section (of the treatment funnel), they’re not comfortable investing,” she said.
Achieving great outcomes also requires companies to differentiate their value.
Maven Clinic uses a business-to-business-to-consumer model to provide patients with information and on-demand access to such specialists as post-partum physical therapists or lactation coaches.
“A woman may see her OBGyn in person, but one in five suffer anxiety or depression (after delivering) and many have trouble breastfeeding,” Ryder said. “Those specialists aren’t included in most in reimbursement models.”
Her clinic provides telehealth and care advocates so healthcare plans can choose options that fill the gap between the app store and the ObGyn.
Too often, “Diseases – endometriosis, fibroids, conception challenges, etc. – are viewed as just being part of women’s life,” Patrick Jordan, CEO of Mycovia Pharmaceuticals and partner at NovaQuest Capital Management, observed. “Yet, women’s health issues need solutions.”
Jordan’s company has an oral therapy for recurrent vulvovaginal candidiasis (RVVC) – chronic yeast infections – in Phase III trials.
“RVVC affects 138 million women annually. We hope to have topline data at the end of the year and the product approved for use in the US by the end of 2021,” he said.
Showing that biotech innovations can make meaningful differences in the lives of women is a key step in generating great economic returns that should be viewed favorably by investors.
“There’s a ten-fold difference between the actual and potential women’s health market,” Jenkins underscored. For women’s healthcare companies to receive the attention is deserves, Sarna called for creating more mid-to-large-cap companies, “even if that means rolling up several players into one, or crossing industries.”
Getting attention comes back to demonstrating value.
“Compare maternity to mental health or diabetes,” Ryder said. “Maternity is a top cost bucket for healthcare, so why not have programs to minimize C-sections and premature births, or manage time in the neonatal intensive care unit (NICU)? A regional healthcare plan manager I spoke with said that was impossible. I replied, “’It’s never been tried.’”
Innovation, therefore, is key. Five years ago the term “femtech” didn’t exist. Now, these trailblazing companies are proving that innovative technologies and platforms can improve women’s health and provide a healthy return to investors, too.
