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Dr. Daniel Haders is currently the Co-Founder of Model Medicines, an AI/ML Drug Discovery company that has built a pipeline of preclinical broad-spectrum antiviral compounds in the last 12 months. Prior to co-founding Model Medicines, Daniel launched the Nex Cubed Digital Health Accelerator. Here, Daniel built an early-stage investment portfolio of 28 Digital Healthcare companies that have an enterprise value of over $200M with investment results that would place the portfolio in the top decile of venture capital. The accelerator has been named one of the "Top Ten Global Digital Health Accelerators" and "The Best Accelerators and Incubators for FemTech Startups." He is also an Operating Partner at Sway Ventures, a venture capital firm located in the United States, where he helps manage Digital Health investment and portfolio supervision. Dr. Haders serves as a Board Observer at Applied VR, a digital therapeutic firm that just received FDA breakthrough device classification for its VR technology.
In an interview with Healthcare Tech Outlook Magazine, Daniel Haders, Managing Director & Digital Head of Nex Cubed, talks about the current status of the healthcare startup space, how it has evolved over the years and the challenges that this landscape is facing today.
How has the healthcare startup ecosystem evolved overtime?
The use of technology such as data science, machine learning, and artificial intelligence, which is radically transforming the face of healthcare, is the most important trend in healthcare startups. Although digital healthcare has been in some form or another since the late 1990s, its current influence on healthcare, both in terms of care delivery and the pharmaceutical business, leads many to believe it started in the early twentieth century.
What are some of the major challenges in the healthcare startups landscape, and how can they be mitigated effectively?
One of the most significant challenges in the US healthcare system is that the person who prescribes medicine or performs a medical treatment is not often the same as the person who pays for the prescription or operation or the person who receives it. As a result, it's very complicated. The structures of who bears the risk are frequently an extreme challenge for healthcare startups because there are quite a few companies that have built technology that solves the healthcare problem, but that technology doesn't fit nicely into the way that healthcare is paid for. So, there is frequently a mismatch between delivering good treatment and having that care paid for with these new technologies.
“If you're going to start a firm, it's not enough for your technology to work; you'll also need a business strategy”
From a technological standpoint, many companies struggle with either producing private data or obtaining publicly accessible data, as pharmaceutical corporations have a lot of unreported poor data. And, as our existing patient record system was not designed to be a true health record, negative data was not given any importance. As a result, there are frequently valuable data behind the scenes that aren't in a medical record, as medical records were never designed to provide healthcare insights. They were built only to allow efficient billing mechanisms. All of these challenges are still obstacles that nearly every digital health care firm is attempting to overcome. It’s not uncommon for healthcare firms to be the ones driving such changes from behind the scenes.
What are some of the trends influencing healthcare startups today?
In terms of trends, there has been a recent increase in the amount of money spent on research and development, notably by pharmaceutical companies that undertake AI, machine learning, medicine development, and drug discovery. On the other hand, decentralization and digitalization of care are also two areas where a lot of money is being poured. So, whether it's tele-health and the systems that support it, or firms that provide chronic illness management software, there's been a lot of money invested in that sector.
However, there have been other advances as the world has grown more aware of and sensitive to the needs of ordinary people. Mental and behavioral health has finally been receiving significant funding from venture capitalists, as well as technology and firms focusing on women's health.
How do you envision the next 12 to 24 months down the line for the space?
First and foremost, a slew of new companies will emerge that are centered on women's healthcare technology and also relevant to mental and behavioral health enterprises. Moreover, the growing adoption of Smartphones and tablets, coupled with healthcare apps, the growing need to control healthcare costs, and the rise in incidences of chronic diseases are expected to fuel the growth of the digital therapeutics market.
How would you advice budding entrepreneurs in this space?
There has been a lot of technology developed in healthcare and care delivery, as well as in pharmaceutical development, that has performed pretty effectively. However, many of these inventions end up as technology with extremely restricted applications. Nonetheless, despite the fact that people have sought to innovate in healthcare for a century, particularly in the US market, the truth is that they now promise to enhance treatment while decreasing costs. However, the fact is that most technologies have only done one or the other. So, it's just you can increase outcomes while also improving costs, or you may lower expenses while improving outcomes but not both.
But, for the first time in the contemporary history of Western medicine, we now have the possibility to do so, because of data, by lowering costs and improving outcomes at the same time. My suggestion is that if you're going to start a firm, it's not enough for your technology to work; you'll also need a business strategy.