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These are Stimulating Times for Healthcare and Life Sciences Sectors
Kiran Reddy
MD & Associate Partner-Third Rock Ventures
Tuesday, April 8, 2014
The industry has been witnessing several trends in the last few years, the most recent among them being increased opportunities for pharmaceutical and life science companies to access funding through the public market. The year 2013 was a banner year for biotech companies due to their access to public market, which further enabled funding of their overall product strategies. Apart from biotech firms, many other companies found this a beneficial trend. Another exciting trend is that big Pharmaceutical, Diagnostic and Device companies are showing interest to partner with small-level Bio-tech companies; in fact, in many cases the partnership starts right from funding. I believe that small companies could be successful if they are able to access the resources and expertise from large companies. Yet another imperative trend is the significant Intersection between health care, life sciences and information technology sectors. With the advent of Cloud analysis and Healthcare IT, the healthcare industry has emerged as a potential investment sector from an innovation point of view. Healthcare IT, a term which was unheard in the industry five to six years ago, has become an important domain for many budding Healthcare companies. There is huge excitement in the industry around Big Data analysis as the aggregation of data would allow a healthcare firm to produce better products and services for consumers and patients. Mobile health is another big trend, which enables healthcare delivery in patient’s respective homes. Mobile health would improve the quality of the healthcare delivery, that too at reduced cost and offers big opportunities for new businesses to be created in the coming years.

Challenges Entrepreneurs Face In the Present Times
It is a challenge to provide high quality healthcare services at reasonable rates. With the significant growth in public market, more financing and capital raising opportunities are coming forward, yet it is still a challenging task to raise capital, especially for devices manufacturing. It is also a challenge for entrepreneurs to keep pace with the rapidly changing environment in healthcare. In addition, the industry currently encounters intellectual property challenges, for instance, the Supreme Court recently ruled that certain drug patterns are no longer valid, resulting in pressure from government regarding cost of healthcare and cost of drugs. Moving forward, it is going to be a challenge to prove the value of certain drugs as well.

The Emerging Areas with Huge Potential for Investment
A large part of our investments are oriented towards gene therapy companies. A few years ago, gene therapy, remained far from reality. The therapy can aid in replacement of infected genes. Other areas worth investing include a platform called crisper technology. To explain this technology, consider an individual gene that is abnormal and disease causing; through crisper, it is possible to replace it with a proper one, thereby bringing in fundamental changes in the way diseases are treated. Another emerging trend with unprecedented potential for future is stem cell therapy. For instance, in case of a stroke or a heart attack leading to loss of cells, stem therapy makes it possible to replace those lost cells.
In short, it is a highly exciting time in our industry. In life science and healthcare investment several technologies are coming up in such a way that it has become a tough task to decide on the most apt investment options. Therefore, from a true innovation stand point, it is a great time to belong to the healthcare industry. (As told to Arun Kant)

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