Talk to a roomful of executives across a variety of different industries and they’ll likely tell you the pandemic changed or sped up innovation in their space to some extent—and that’s none more clear than in health care. And there’s more change to come, according to industry insiders.
Adoption of technologies in health care accelerated by leaps and bounds during the pandemic, according to some investors.
“It’s not an industry that has historically been particularly good at adoption. And I think what happened during COVID is instead of it being nice-to-have, things became must-haves,” Emily Melton, founder and managing partner at Threshold Ventures, said onstage at Fortune’s Brainstorm Health conference in Marina Del Rey, Calif. on Tuesday. “And once … that genie is out of that bottle, we’re not going back.”
That’s true of what venture capital investors like Deena Shakir, a partner at Lux Capital, which invests in companies like women’s health startup Maven, are seeing as well. “A lot of these digital transformations … are [here] to stay, and a lot of the realization of some of these major stakeholders has been that it’s through partnership,” she said. “A lot of the early stage companies that we’re starting to find now are seeing that in those early days.”
Against that backdrop, even with the broader equity markets in free-fall, she predicted, “it’s actually a really good time to be an early stage health care investor.”
Yet early data suggests venture investments in health care in particular have been petering out: After hitting record highs in 2021, venture funding flowing into digital health startups slowed nearly 40% from the fourth quarter of 2021 through the first quarter of 2022, according to a recent CBInsights report. And biotech stocks have had a rough year in the public markets as well.
Threshold Ventures’ Melton predicted, “I don’t think it’s going to bounce back right away, but I’m very bullish in the long term.”
Meanwhile, “for [startups] that are very early stage, … I just see some funding slowing down, and that’s probably better for those of us who take that long view,” Scott Barclay, managing director at Insight Partners, forecasts. But “for some of the stuff that [is] growth, I think it’s a really tough next six to nine months,” he estimated.
While COVID is the health crisis that’s been front and center for the past couple years, mental health has become an increasingly pertinent issue for companies, researchers, and doctors who are working to help those suffering. And some in the health care field believe the answer to some of those struggles could lie in the therapeutic use of psychedelics and drugs like ketamine or MDMA.
“I think they will have completely changed how we think about mental health and well being and I hope that many of them replace alcohol in our corporate lives and personal lives. I’ll think we’ll be much better off for it,” predicted Neil Markey, cofounder and CEO of Beckley Retreats, a psychedelics retreat startup.
Still, the ongoing pandemic continues to be top of mind for executives of all industries; Pfizer chairman and CEO Albert Bourla estimated that variant-specific boosters, which could protect against morphing versions of the virus, will likely be available in the U.S. in the fall, also noting that “we don’t have a vaccine that will do the job right now, something that will hold a year. That’s one of the most important challenges, I think.”
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