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“To describe my mother would be to write about a hurricane in its perfect power.” —Maya Angelou
Time to check sensitive masculinity at the door for this one.
I’m here to talk about the source of all life itself - the female body.
Rising awareness and acceptance of women's health issues have been driving a trend towards investing in female-focused digital healthcare solutions.
According to Pitchbook, 2021 has been a landmark year for Femtech with global VC investment crossing the $1 Billion mark for the first time:
This is incredibly empowering to see and has long been a far under-represented area.
But what are the driving factors behind this?
What deals are getting done? And which ones should we be paying attention to?
This week, in <5 minutes, we’ll cover Femtech:
Origins 👉 A Surprisingly New Concept
Addressable Market 👉 Large + Growing
The Big Players 👉 Incumbent’s Role in the Market
Women-Focused Deals 👉 Maven Clinic, Flo, Willow, Elvie
How GRIT’s Playing it 👉 New private deals on deck
Let’s get started!
1. Origins 👉 A Surprisingly New Concept
We’ve come a long way in accelerating social change in the last decade, which is why it’s so surprising that the term Femtech is still new. The term was coined in 2016 by Ida Tin, a Danish entrepreneur who founded Clue, a period and fertility tracking app.
Michelle Tempest, Partner at health care consultancy Candesic, says one reason women-related needs had not been focused on in the field of technology was that Life Science research was overwhelmingly “tailored to the male body.”
In 1977, the U.S. FDA excluded women of childbearing age from taking part in drug trials. Since then, women have been underrepresented in drug trials, Dr. Tempest said, because of a belief that fluctuations caused by menstrual cycles could affect trial results, and also because if a woman got pregnant after taking a trial drug, the drug could affect the fetus. As a result, she noted, “we do lag behind men.”
For change to drastically happen, women need to be placed in more leadership roles within healthcare organizations.
“According to the U.S. Bureau of Labor Statistics, nearly 80 percent of healthcare workers are women, yet they hold fewer than 20 percent of key leadership roles,”
- Katie Bell, Korn Ferry global account lead for the Healthcare Sector.
We’re starting to see a little bit of a change, but a more drastic one needs to happen in key leadership roles to move forward.
By largely neglecting this demographic, organizations are missing out on a massive opportunity, and more importantly, women are being drastically underserved in healthcare.
It’s time to bridge the gap.
Under the Radar
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2. Addressable Market 👉 Large + Growing
According to Grandview Research, the global women’s health market was valued at around USD$32 billion in 2019 and is projected to increase at a CAGR of 4.9% over the forecast period.
Market drivers include rising incidence of targeted diseases, increased life expectancy, increasing initiatives by governments to provide support, and rising publicly-funded family planning services. Restraining factors include patent expiry of major drugs, lawsuits related to products, and adverse effects associated with the use of contraceptive drugs and devices.
Now, let’s check in with our Outrageous Chartered FinMEME Analyst Dr. Patel!
3. The Big Players 👉 Incumbent’s Role in the Market
Some of the key players operating in the pharma market are Allergan, Bayer, Merck, Pfizer; Teva, Agile, Amgen, AstraZeneca, Bristol-Myers Squibb, and Ferring. These companies focus on product development, expansion of product portfolios, and regional expansion in emerging markets as main market share drivers.
Big Pharma in this space has typically patented drugs that can be applied more broadly, but also for specific cases predominantly found in women.
For instance, women are more susceptible to various diseases, especially post-menopause such as osteoporosis, osteoarthritis, obesity, anemia, menstrual health disorders, depression, and fibromyalgia. According to the UN, about 10-15% of all adults age over 60 have some degree of osteoarthritis, and the condition is more prevalent in women.
In Pharma there is a discovery period followed by a trial period, then ultimately a patent is issued for a certain amount of time. After the patent expiration, many other producers can receive FDA approval for the generic version, ultimately making the drug more accessible and affordable.
For instance, after the patent expiry of Evista, a product of Eli Lilly and Company, more than 24 players manufacture its generic version. Evista is the trade name of raloxifene, which is a Selective Estrogen Receptor Modulator (SERM).
The drug is indicated for the treatment or prevention of postmenopausal osteoporosis in women. The patent for Evista expired in 2014. Raloxifene, the generic drug, was approved in 2014 for lowering the risk of breast cancer.
To stop this decrease, market players focus on gaining FDA approval for new indications (use cases listed in the patent) to prevent loss in revenue post-patent expiry.
For instance, Prolia is recommended for postmenopausal women who are susceptible to bone fractures due to osteoporosis. The indications differ according to the approvals across various geographies.
In the U.S. for instance, it is mainly used as a second or third line of treatment for women who have suffered at least one or multiple osteoporotic fractures. In Europe, it is prescribed for women with a high risk of osteoporotic fractures and as a treatment of osteoporosis.
By changing the indications across geographies, legacy drug providers effectively extend the value of their patents.
So that covers a brief overview of the operating environment in Big Pharma - long lead times with heavy R&D through trial phases, following by diligence in patent protection which ultimately leads to a generic, more affordable version of each drug.
Now let’s look at targeted solutions that focus on digital and consumer-facing women’s health.
4. Recent Deals 👉 Maven Clinic, Flo, Willow, Elvie
Maven Clinic was launched in 2014 as a virtual clinic for women’s and family health, offering care for fertility, pregnancy, and parenting. The company has supported more than 10 million women and families, and raised over $200 million.
Maven has built out a telehealth network of more than 30 provider types with individual care navigation to support all parents and all paths to parenthood, from fertility through pregnancy, parenting, and pediatrics.
The secret sauce here is a more holistic platform that plugs into all aspects across the family.
Maven has also began offering fertility drug delivery to its members in a partnership with pharmacies Alto and SMP. The drug delivery program, called MavenRx, helps address two of the more challenging aspects of the fertility journey: the high cost of fertility medications and complexity around managing a strict regimen, including self-administration of injections.
Maven has seen rapid growth and significantly increased its client base across employers and payers. The company partners with four new Fortune 15 clients, including Microsoft, with membership in Maven's employer and payer-sponsored programs increasing 400%.
The company says it has a near 100% retention rate among existing clients like Boston Scientific, Booz Allen Hamilton and L'Oreal. Quality and accessibility have also remained high, with 27-minute average wait times for same-day appointments and a 4.9/5 appointment satisfaction rating across all specialties.
Flo is the creator of a period-tracking app that aims to enhance personalization and provide users with advanced cycle insights and symptom patterns to help them effectively manage and proactively improve their overall health.
The company runs a subscription-based model for more than 200 million users and aims to achieve $100 million in ARR (annual recurring revenue) by the end of this year. Founded in 2016, the London-based company is now valued at $800 million.
Elvie is a femtech company focused on the devices and wearable space. They have several products for every stage across the feeding journey. Their pump product is a silent, wearable electric breast pump designed to discreetly slip inside a bra, and is wire-free, hands-free, and controlled through a cellphone.
By integrating both hardware and software components, elvie is providing an apple-like user experience that brings women’s tech out of the dark ages.
5. How GRIT’s Playing it 👉 New private deal on deck!
I’m currently in discussions with a private femtech company that is also in the device space. This company is in a similar space to Elvie, where it looks to provide a personalized feeding system that allows customization of the bottle to ensure the best experience possible.
What I like about this company is that they have a companion app that provides personalization, tracking, and scheduling capabilities.
As with the leaders in traditional technology, providing a full support platform with a stress on the user experience is key for retention.
Make sure to sign up for the PAID version of the newsletter to get an inside scoop and access to up and coming deals.
I think every burgeoning sector has incumbents that need to get disrupted by emerging technology in order to ensure a more healthy and competitive ecosystem. We’ve seen how big Pharma can create massive moats with pricing power, but when looking at women’s health, we need to take a more holistic, platform-like approach.
This hasn’t gotten anywhere near the attention it deserves due to funding gaps as well as the lack of females in positions to implement change. Both of these are improving, but we still have a lot of work to do…
Until next time. Always Yours. Incessantly Chasing ROI,
-Genevieve Roch-Decter, CFA
P.S. Visa just announced that they are building an Ethererum-based layer 2 payment channel. How long can you afford not to be long crypto? Asking for a friend.
What else we Grittin’ On?
FOX. Did you catch Genevieve on Fox Business this week? Let’s just say she’s not a 45 year old man who gets scared and sells the dip. She’s got diamond hands and she ain’t afraid to show it ; )
INSIDER TRADING. New research shows insider trading is everywhere. Purchases made by U.S. executives outperformed the S&P 500 by an average of 5% percentage points between 2015 and 2020. Smells like Nancy Pelosi capital.
BTFD. Worst last day of the month for the S&P 500 in September in 10 years. Best first day of the month for the S&P 500 in October in 14 years.
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