Business of Obesity: What VCs are missing out on!!

Venture Capital Returning to Medical Device and Biotech Sector after burning money in healthcare IT.

Venture Capital Returning to Medical Device and Biotech Sector after burning money in healthcare IT.
The year 2013 will be one of climbing out from a long era of darkness for venture capital. After all, you have to go all the way back to 1999 dotcom to find a time when VC earned market-beating returns. When recession hit, the VCs regressed to what they know made money for them IT. Suddenly the VC all jumped on social media play in healthcare, healthcare records, apps that monitor heart rate, blood pressure, oxygenations..silly stuff..thinking this is the way to go.y

Silicon Valley professionals must step out of their 10Mile radius to see what the country need. Just because their next door neighbor worked and made money at FB or twitter the investor thinks the whole life science industry is now moving  to their smart phones to figure out how to treat problems. IT firms can bring knowledge, not treatments. For example, it can tell a patient all about their errectile dysfunction but will not be able to treat them.  VCs learned this the hard way, all of 2008to 2013 was spent on these new apps, health care record technology and now realizing there is no IP, no patent protection, no exits, instead dealing with crazy competition and no chance of exits.
A general survey of VCs conducted in 2012 " tyipical herd mentality" generated the following results of the survey : Capital is expected to flow into start-ups that provide information technology to businesses. More specifically, 61% of respondents expected increased investment in business IT, while 57% predict a rise in investment in health-care IT.
What happened: Typical VC fund was a big money-loser, generating an internal rate of return of -5.2%

In 2013, Some VCs started buying stake in start-ups that were winding down just to show the deals to their LPs. They would put their associates in-charge of the  start ups. The associates supposed to be from top notch schools, thought this is promotion. It was the paradox, they were set to fail with a poorly run and bad technologies. But the VCs firm looked good on the books. That's what matters when it comes to "CYA"
It appeared that the VCs were reorganizing and making a lean team, but infact were buring more on inefficient companies in the hands of rookies!

Smaller VCs who follow large VCs blindly put good money after bad money. What are the small VC firms thinking?. The large VCs acted because of their frustration with FDA, recession and tax issues.
Now after burning their money in the IT space, they are back to medical device and biotech sectors. They are seeing FDA turning around, more demand for med device sector worldwide. 2014 will see the return of the VC to the medtech and biotech sector.

10 Hot spots for investment:

1) antibodies against cancer and anti-inflammatory ailments, specializes in double-target
2)  Cancer diagnostics
3) Age related dementia research
4) Obesity both devices and drugs
5) Diabetes with new technologies on biologic and insulin therapies
6) Nutrition
7) Orthopedic and spine
8) Technologies treating renal disorders
9) Psychiatric disorders
10) neurostimilation and neuro-biologics

Obesity and Diabetes Treatment, Innovation and Prevention Summit, Jan 30-31, 2014 in Orange County, Ca

Attend the first Obesity and Diabetes Treatment, Innovation and Prevention Summit

This is a great opportunity for health care professionals including physicians, nutritionist, nurses, hospital administrators, research professionals, scientist, policy makers, insurance providers, group purchasing organizations, non profits foundations, start ups and mature companies wanting to learn about prevention, identification and treatment of obesity. This event will bring, key opinion leaders to talk about various methods to identify, manage, treat and prevent obesity and diabetes. Twenty innovative companies working in obesity and diabetes will showcase their technologies to attendees so the community is aware of the next generation technologies available to their patients and future developments. Strategic companies can take advantage of this summit. ODIS is the first of its kind obesity and diabetes summit held on the west coast.

When:  Jan 30 -31, 2014

Where: Westin, South Coast Plaza in Orange County, CA.  

To attend contact: Info.odis1@gmail.com

Orange County is known as a hub for medical device innovation.  This event will elevate the visibility of Southern California and innovative companies in the fight against obesity and diabetes. 

 In July 2013 the American Medical Association declared that obesity was a disease.  Obesity and related healthcare issues cost the US $190 Billion annually. This is an important time in the fight against obesity and diabetes

To sponsor, showcase or qualify to present please email a non-confidential company profile to info.odis1@gmail.com

Top 20 in the obesity and diabetes space will be presenting at the innovation summit.

Obesity and Diabetes Innovation Summit is being presented by TrialMed Life Sciences and SEVEN (Scientific Entrepreneur & Venture Capital Network). 

 

VCs tip toeing to Med tech start ups after AMA declares obesity as a disease. Obesity market to touch $139 B

VCs tip toeing to Med tech start ups after AMA declares obesity as a disease. Obesity market to touch $139 B

But is it too late for VCs? Many of the clinical stage companies are already funded by boutique investment firms or companies.
BARONOVA got its funding not too long ago.
RESHAPE is on its way to complete its clinical trials
Obalon is San Diego based and has raised capital
Onciomed, Inc based in Irvine is raising Series A or Series B capital

Vivus pharma stock is ticking! Arena's drug is approved.
It seems the FDA is on a fast track for obesity related problems.
Now maybe the NIH may open funds to promote innovation in this space.

VCs may have limited opportunity to jump in!
The problem is profound and options are few this translates to a multi billion opportunity! these investors have been waiting for.
Obesity interventions in early 2000 were too ahead of its time. If companies during that time would have stuck around they would have seen billion dollar exits.

This is an important time in the fight against obesity and diabetes

For the first time there is going to be a Obesity & Diabetes Innovation Summit in Orange County, California in Oct 3-4, 2013. 

10 Medical device and 10 pharma companies will be talking about their innovations in obesity and diabetes. Sponsor companies will get an opportunity to voice their support for obesity.

Who should attend:

 Medical device and pharmaceutical executives, business development executives (tremendous opportunity to partner with young start ups early).

Sponsor companies who are joining the fight against obesity.

Start up companies who can get tremendous visibility to investor and strategic partners

VCs, private investors, PE executives and boutique investment bankers as this new disease classification brings more opportunity in this space.

Doctors, Nutritional experts, medical device, pharma and hospital/healthcare executives, allied health care professionals.

To sponsor, showcase or qualify to present please email a non-confidential company profile to info.odis1@gmail.com

Top 20 in the obesity and diabetes space will be presenting at the innovation summit.

North American Obesity Market to Swell to $139.5B by 2017, Spells Opportunity for Device Makers-

North American Obesity Market to Swell to $139.5B by 2017, Spells Opportunity for Device Makers

A new research report forecasts that the weight loss and obesity management market in North America will increase to $139.5 billion in 2017, up from $102 billion in 2012.

The market includes medical device products used in weight loss surgery, and the report from MarketsandMarkets underscores the opportunity for medical device manufacturers. In the medical device arena, the opportunity seems to be primarily in areas that provide patients an alternative to invasive surgery. The report said:

Minimally-invasive and non-invasive surgical procedures that use highly sophisticated equipment like endoscopes and laparoscopes have been developed. In addition, non-invasive weight loss techniques like cryolipolysis, transoral obesity revision surgery, cold laser shaping, and Stomaphyx are also gaining popularity.

It remains to be seen whether American Medical Association's decision to consider obesity a disease will have an effect on the overall size in the market. When the June decision from the AMA came down, it marked a real uproar because some believed that considering obesity a disease basically means that individual responsibility can be denied. People who lead unhealthy lifestyles can simply believe that clinical intervention is automatically required instead of a change in behavior.
The same debate has spilled over to a discussion on the LinkedIn Medical Devices Group. Politics aside, what is salient about the discussion is that some users of the group believe the growing market holds great promise for medical device inventors.
Take user Paul Stein for instance. A medical device professional, formerly with St. Jude Medical, Stein believes that medical devices will succeed in tackling the epidemic that is obesity where pharmaceutical companies have failed. Here is an edited version of his comments:

For us in the medical devices industry, we need to look at this as a tremendous opportunity to create the next generation of medical devices.
The current set of drugs, along with their toxicities, do very little. And, the one marketed medical device, the Lap Band, has proven its worth in treating obesity. But, the most important fact that needs to be soberly understood is that the little medical device company that invented that device was paid $1.2B by Allergan for it. Yes, that's a B.
One of the other very popular treatments for obesity, the vertical sleeve gastrectomy, uses several thousands of dollars of linear staples (Covidien, J&J) per procedure. Performed over a million times per year, you do the math.

Stein points to one startup that he is working with - Onciomed - that he believes has the potential to address the global obesity challenge. The Irvine, California firm has devised a minimally-invasive procedure called the GVS System that restricts food intake while providing a feeling of fullness and satiety.
Fred Voss, another LinkedIn user who commented on the discussion, is also working on an innovative device to treat obesity while achieving the positive effects of bariatric surgery. San Clemente, California-firm PlenSat, where Voss is CEO, has developed what it calls digestible balloons. The capsules containing the balloons can be ingested over several days, thereby slowly changing stomach volume. They result in the patient feeling a sense of fullness.
The opportunity in treating obesity is not simply limited to startups though. Another LinkedIn user, Patrick Pickerell commented on how insurance reimbursement for devices used in obesity procedures as a result of AMA's decision is proving to be a boon to his company - Peridot. Pickerell is president of that firm based in Pleasanton, California.

My company (Peridot) is a supplier of precision metal and plastic components to the minimally invasive device companies. As such we have at least half a dozen clients in the stomach reduction space that have placed their bets on just such a ruling. Insurance reimbursement codes mean the difference between a viable exit/sale of these startups so from a business standpoint (somewhat selfishly I admit) I am glad for the ruling.
From an economic point of view it seems better to treat obesity now than pay for the long term effects of diabetes and heart disease.

 [Photo Credit: iStockPhoto.com user jangeltun]

-- By Arundhati Parmar, Senior Editor, MD+DI

Incentive to invest in Obesity! This is an unmet need.

We all know that Obama care will make it more expensive and we will pay more out of pocket to get treatment.
Obesity cost the nation $140 Billion annually.Obesity is the world's biggest market.

The policy makers can make it easy by incentivizing VCs to invest in Obesity technologies and in life science technologies. This will enable innovation or we will be paying more for royalties to international innovators.
WHITE HOUSE its up to you now!!!

Ultimately, Obamacare  may be able to offer healthcare to a wide array of people but may fail to remedy the ills of rising health insurance and healthcare costs. Meanwhile, in addition to taxes and penalties, the new entitlement program will be financed by more than $700 billion in cuts from Medicare over a ten year period. This means that retirees will need to buy additional supplemental insurance through one of the health care companies.

Next gen technologies in the obesity and diabetes space are more robust and stronger than they were in the last decade. 

Biggest Heatlh Care Market: Obesity - Onciomed, Inc has the patented technology

Irvine, Calif.-based medical device company Onciomed, Inc., has received a U.S. patent to treat obesity and diabetes with a path-breaking minimally invasive procedure. Raising Capital.
for inquiries: Raj@onciomed.com
or info@onciomed.com
The medical device, GVS technology system, mimics gastric surgery without the need to cut the stomach and offers an alternative to highly invasive, irreversible bariatric surgery.
“We restrict the stomach and imitate the procedure similar to gastric bypass surgery, without cutting portions of the stomach,” said Onciomed founder and CEO Dr. Raj Nihalani, who developed the device.“This technology helps us get to the next level of intervention without doing much harm,” he told India-West.

Nihalani has worked for nearly 17 years in the medical device sector — where he focused on cardiology research, invented devices for coronary stents, and worked at start-ups including Endologix  ( acquired by larger company).
Nihalani said he was inspired to address major health issues not only in the U.S., but worldwide. His research led to his focus on obesity and diabetes, which he said is “one of the biggest healthcare markets in the world.”
Onciomed’s process involves a single incision laparoscopic procedure. Once in place, the GVS provides a feeling of “fullness and satiety” and reduces absorption of fat and glucose.
Nihalani noted that the company has the opportunity to expand to 20 additional patents. Currently, Onciomed is raising capital and inviting private investors to invest in its technologies. The goal is to do clinical trials outside the U.S, and eventually seek U.S. Food and Drug Administration approvals.
“With the invention of these novel products, what it does is it reduces the absorption of fat and glucose at the intestinal level which can help with diabetes prevention or reduce dependence. It can really help these patients not only lose weight, but correct diabetes status,” Nihalani said.
According to the World Health Organization, obesity has nearly doubled since 1980. In 2008, over 1.4 billion adults were overweight and more than half a billion were identified as obese. About 2.8 million people die from conditions related to being overweight or obese, the WHO said. More than one-third of adults in the U.S. and about 17% (12.5 million) children between the ages of 2-19 are obese, according to the Centers for Disease Control and Prevention.
“What we are working on is a very novel technology. We feel that this is the next big thing in the healthcare field, and I’m glad that I am one of the first Indians to get patents in the obesity and diabetes phase,” Nihalani told India-West.
A study, “South Asian American Perspectives on Overweight, Obesity, and the Relationship Between Weight and Health,” was recently published through the CDC. It looked at the effects of health and weight among South Asian Americans by interviewing 75 South Asian Americans and measuring their BMI (body mass index). About 67% of the participants in the study were identified as overweight or obese and about 82% of those who were obese believed their weight affected their health, according to the study.
South Asians have higher risks for both cardiovascular disease and Type 2 Diabetes than do most other ethnic groups, the study noted.
“Among all Asians in the United States, South Asians have the highest rates of overweight and obesity,” the study said.
Children are also at risk for diabetes and obesity, especially with dietary changes and accessibility to junk food and carbonated drinks. “For South Asian children, 14 percent are obese. It’s lower than the general U.S. population, but yet there is a tendency to be obese,” Nihalani said.
The Indian American entrepreneur explained that in recent years the size of portions offered to children at schools has dramatically changed. “How we eat and the way we eat has changed. Obesity trends have increased in the last two decades. Portions (children) are offered and complex carbohydrates have drastically affected wave points. It won’t end, so this is going to be a very big issue," he asserted.
“One in six kids is obese in the United States and one in 10 kids is obese in the South Asian population,” he emphasized.
Nihalani hopes to focus in the future on addressing childhood obesity and set aside a portion of the profits in his current venture towards that goal.
“I want to focus on how to connect the two worlds on the healthcare front and the ones in developing countries — how to connect the knowledge and infrastructure here and how to integrate that for healthcare," he said.

Read more at http://www.indiawest.com/news/10077-onciomed-patents-minimally-invasive-obesity-treatment.html?goback=%2Egmp_2136343%2Egde_2136343_member_230290831#UOcVOweGMGmBoQ7M.99