Globally, healthcare companies have raised over 3,400 rounds this year and are on target to exceed 4,500 annually for the first time. Companies have raised over $37.5B through the first nine months of 2019, according to a CB Insights report.

Global venture funding in artificial intelligence-based healthcare startups continued its record-breaking upward trend in the third quarter of 2019, totaling almost $1.6B across one hundred and three deals. The funding influx far surpasses the previous record set in the second quarter, when AI startups raised $864M across seventy-five deals. Third-quarter funding was driven in large part by the $550M Series C funding round that Babylon Health closed in August, which the London-based startup claimed was the largest-ever funding round for any digital health startup in the U.S. or Europe.

“Given that the cost to develop new technology continues to decrease, the appetite for new and better ways to care for people is increasing, and the amount of capital available for healthcare entrepreneurs is at an all-time high. There has never been a better time to be an entrepreneur than now.”
Thomas Hawes, Blue Cross Blue Shield Venture Partners

While digital health represents almost one-third of year-to-date VC funding in healthcare, digital health related deals slowed in the third quarter: The sector experienced a significant drop from the record-setting $5.2B raised across three hundred and eighty-nine deals in the third quarter of 2018, down to $3.2B across three hundred and twenty-eight deals during the same time period this year.

Valuations continue to rise, driven by mega-rounds ($100M+) in fourteen companies this year. There are now thirty-seven VC-backed healthcare unicorns with a valuation of $1B+, worth a combined $92.1B. Eighteen of the unicorns are based in the U.S., nine in Europe, nine in Asia, and one in Israel.

The number of microbiome companies receiving VC funding is likely to exceed last year’s investments in sixty-five companies, while the total amount of funding is likely to be below last year’s record of $978M.

The top three precision medicine startup deals in 2019 YTD are Tempus with $200M, Freenome with $160M, and Thrive Earlier Detection with $110M. All three companies are presenting at PMWC 2020 Silicon Valley.

Fueling this rise in funding activities are multibillion-dollar M&A deals
Two of the world’s biggest pharmaceutical companies struck multibillion-dollar deals in early December aimed at bolstering their portfolios in the fiercely competitive cancer drug market. Merck announced that it would spend $2.7B to acquire ArQule, a precision-focused biotech targeting indications with a high unmet medical need. Sanofi SA said it would spend $2.5B, a 172% premium, to acquire Synthorx, in an effort to catch up with oncology rivals. Lastly, Novartis closed a $9.7B deal to buy cholesterol drug maker Medicines Co.

These are exciting developments as they point towards acceleration of precision medicine across the pharmaceutical and clinical sectors. It is thus only fitting that as the leading precision medicine conference, PMWC 2020 Silicon Valley has invited various investors that can speak to these strategic developments, as well as companies that are leading the way to technological advancements that will impact drug discovery, development, clinical diagnosis, and disease treatment or prevention.

PMWC 2020 Silicon Valley sessions include:
• The VC Perspective on Immunotherapy panel: will discuss the current state and areas of immunotherapy investing, successes and challenges, and what has changed in the last 5 years. This panel is chaired by Risa Stack (RS Bioventures).
– Panelists include: Jorge Conde (Andreessen Horowitz), Nina Kjellson (Canaan Ventures), and Brian Daniels (5AM Ventures).
• The VC Perspective on Paradigm-shifting Opportunities in Cardiovascular Disease panel: will discuss the status quo on VC investment in cardiovascular disease area. Panelists will explore how new preclinical discovery paradigms, the use of personalized medicine approaches (i.e., biomarkers for patient stratification and trial acceleration), and novel therapeutic modalities could change the trajectory of VC investment in the cardiovascular space. This panel is chaired by Matthias Kleinz (IPMC Enterprises).
– Panelists include: Nicholas Simon (Blackstone Life Sciences), Alexis Ji (Illumina Ventures), and Abraham Bassan (Samsara BioCapital).
• The VC Perspective and Fund-raising Strategies in AI/ML panel: will discuss the future of the investment sector, how investments in AI/ML are shaping healthcare, and what to expect in the years to come. This panel is chaired by Greg Yap (Menlo Ventures).
– Panelists include: Julie Grant (Canaan), Nan Li (Obvious Ventures), and Vineeta Agarwala (Physician-scientist & life science investor).
• The Investing in Lab Services and Technologies panel: will provide insights from payers that have been actively investing in companies that are developing innovative lab services and technologies. Successful entrepreneurs will share their experiences at enabling hospitals and healthcare systems to improve efficiencies in the lab, optimize their laboratories to realize gains, and deliver on the imperatives of improving patient outcomes while reducing costs. This panel is chaired by Thomas Hawes (Blue Cross Blue Shield Venture Partners).
– Panelists include: Dave Daly (Thrive Earlier Detection), and William Hagstrom (Octave BioSciences).
• The Investment in the Microbiome panel: will provide the biotech and life sciences VC community perspective on human microbiome research. This panel is chaired by Manoj Dadlani (CosmosID).
– Panelists include: Denise Kelly (Seventure Partners) and Alexander Morgan (Khosla Ventures).

Register by December 19 to January 21-24th’s PMWC so you don’t miss out on this unique opportunity in this critical time of rapid developments in the field of precision medicine to learn from thought leaders and key stakeholders in the industry how advancements in areas such as pharmacogenomics, cardiovascular disease, artificial intelligence/machine learning are shaping the future of patient care. Secure your spot at this important scientific gathering, and engage in the dialogue to share your ideas and learn from others as we together lay the groundwork for tomorrow’s healthcare.

I am looking forward to welcoming you on January 21-24 in Santa Clara.