From JP Morgan to CES – The Forging of Unlikely Partnerships

Despite the fact that we all aspire to help patients, the various factions of the healthcare industry reflect sharp contrasts in economics- especially in terms of funding needs and time to market.

Typical for the not-hot and highly regulated therapeutic drug sector, Onyx’s Nexavar took over 10 years and hundreds of millions of dollars, with several venture rounds and now a revenue reinvestment business model to expand the portfolio.

In contrast, Vocera’s low-barriers-to-entry mobile hospital communications “solutions” only needed less than $70 M in venture funding, to create several commercial products at the time of their IPO.  Despite this pioneering event for the mHealth sector, Vocera’s IPO passed without much fanfare.

I came away from the JP Morgan Vocera presentation with an impression of slow but steady business progress- but still wondering how the Experia acquisition fits into their overall strategy.

In contrast, I am puzzled by Athenahealth’s takeover of Epocrates for $293M.

To a standing-room-only crowd at JP Morgan, the deal was explained as bringing together two pieces of the puzzle that needed each other: Epocrates was bought for the “name recognition” that Athena desired, while Athena had the revenue that Epocrates desired.  Thinking beyond the spin, it seemed to me  Epocrates had lost its way in a rapidly accelerating market and was probably grateful to be acquired by someone willing to pay.

Unlikely Partnerships abounded at CES:

  • An insurance company, United Insurance had a CES display booth filled with games and apps that made it look like a health and wellness company
  • A calculator company, Texas Instruments, is offering health imaging and fitness apps
  • A chip company, Qualcomm, is today interested in data pooling as part of Qualcomm Life
  • A consumer electronics company, Sony, has started using near-field communication as part of its NFC Healthcare Near field communication

Last but not least, pharma marketing agencies are no longer selling drugs, they are helping patients!

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