There’s Less Pie in the Sky as Wireless Health Gets Connected

5/30/13Follow @bvbigelow

Attendance at the annual Wireless-Life Sciences Convergence Summit in San Diego has remained relatively steady in recent years (the first conference was held in 2006), but there has been a phase change in the industry over the past year. As with many emerging technologies, the wireless health industry has been growing slowly, slowly, slowly—and then suddenly very fast.

As it has from the beginning, the conference remains focused on healthcare information and services delivered via wireless networks and mobile devices. But there is a different look and feel this year. There is less pie in the sky. Instead of circling “mobile health” or “wireless health” as concepts unto themselves, the industry is coalescing around the bigger idea of “connected health”— of connecting sensors and devices to electronic health records and vast clouds of interactive healthcare information that can be personalized for millions of users.

“It’s exciting to see the market mature,” says Chris Hoffman, a senior director at TripleTree, a boutique investment bank in Minneapolis, MN, and an early sponsor of the San Diego-based Wireless-Life Sciences Alliance (WLSA). “We’re seeing real solutions with real opportunities for interoperability.”

One sign of industry change is evident in the makeup of the conference itself. Of the 275 people attending the conference (the number of registrations is limited), 25 came from outside the United States (China, France, Germany, India, Italy, Japan, the Netherlands, and United Kingdom.

To Hoffman, the catalyst that changed everything was the $293 million deal that Watertown, MA-based Athenahealth signed to acquire Epocrates, the San Mateo, CA-based developer of the No. 1 mobile medical app for U.S. physicians. Athenahealth is a leading provider of cloud-based electronic health records, practice management, and care coordination services to medical groups, and Epocrates—as Athenahealth CEO Jonathan Bush put it—is the “Angry Birds” of healthcare IT.

Venture investments for digital health startups also increased substantially, according to Wain Fishburn, a founding partner of the Cooley law firm’s San Diego office and a life sciences and venture capital practice leader. “Last year there was a tsunami of dollars invested in digital health,” said Fishburn, who told the audience that VC funding surged 30 percent, from $970 million in 2011 to $1.4 billion in 2012.

Of the $1.4 billion invested in 2012, Qualcomm Life has been the most active investor, according to Don Jones, a Qualcomm Life executive who co-founded the WLSA and now serves as chairman. Qualcomm (NASDAQ: QCOM) has not disclosed exactly how much it has invested in digital health startups, but Jones also noted that Walgreens and Aetna have each embarked on multi-million dollar efforts to develop software for health-related applications.

The increase also has been evident at the annual Consumer Electronics Show in Las Vegas, Jones said. “CES went from no [digital health] exhibitors three years ago to over 300 exhibitors in a dedicated pavilion this year.”

“Another big trend of the last 12 months is that big pharmacy is here, and they’re building real products,” Jones said. While Johnson & Johnson has been involved since the early years of the WLSA, Sanofi, Roche, and Lilly have begun to commit substantial resources to R&D in connected health over the past year. “If they were here before, they were just kicking the tires,” Jones said.

Another trend emerging in recent years is in basic research, where dedicated R&D centers have been proliferating. In addition to UCLA, the University of Southern California, UC San Diego, and San Diego’s West Health Institute, Jones said UC San Francisco, Harvard University, Cornell University, and Georgia Institute of Technology have all established R&D centers focused on connected health in recent years.

The phase change became especially clear during a series of presentations yesterday afternoon in a session billed as “Business Models Built to Last—Perspectives from Early Stage Successes.” In each case, the technology innovation addressed real problems and the CEOs outlined sound and practical business strategies:

FitLinxx, founded in 1993 and based in Shelton, CT, has expanded from its core expertise in developing computerized exercise tracking systems to providing wellness programs that include wireless activity monitors and Web applications. The Pebble, designed for use in corporate wellness programs, is a wearable wireless device that monitors physical activity and provides data to Web-based health information that can be customized to support, motivate, and guide each user. CEO Dave Monahan said FitLinxx has about 75 partners, including Healthrageous, National Jewish Health, and Sonic Boom.

MC-10, founded in 2009 in Cambridge, MA, makes “wearable electronics”—soft, stretchable, and conformable microchips that can be applied like Band-Aids to monitor heart rate, body temperature, brain activity, and other biometrics. “The fundamental problem we’re solving is that electronics are hard and boxy, and humans are soft and curvy,” CEO David Icke said. With wireless connectivity and continuous data analysis, MC-10’s technology can be used to provide consumers and caregivers with what Icke called “seamless sensing.”

Telcare, founded in 2008 in Bethesda, MD, developed a comprehensive system for managing diabetes that includes the first wireless glucose testing meter approved by the FDA, two-way messaging with an FDA-cleared care management center, and a suite of iPhone and Android apps that enable family members to monitor and help with the diabetes management. “We’ve probably spent $5 on FDA compliance for every $1 we spend on software development, and $3 on FDA compliance for every $1 we’ve spent on electronics and hardware development,” Telcare CEO Jonathan Javitt said.

In a related update today, TripleTree named the three winners of its 5th Annual iAwards for Connected Health. The winners were selected from 12 finalists that presented their technologies late yesterday afternoon. The categories and winners are:

—Clinical effectiveness: Healthsense, based in Mendota Heights, MN, provides monitoring services for aging seniors.

—Consumer engagement: AgaMatrix, of Salem, NH, provides wireless blood glucose testing, reminders, and data analysis.

—Operational effectiveness: CyraCom, based in Tucson, AZ, provides over-the-phone language interpretation, translation, and related services for healthcare providers.

TripleTree also named Asthmapolis as the recipient of its 2013 Horizon Award, recognizing their unique advancements in chronic disease management via connected health. Founded in 2010, the Madison, WI, startup using sensor-equipped inhalers, mobile applications, advanced analytics and feedback to help physicians identify patients who need more help controlling their asthma.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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