Global Pharma Giants Are Powerfully Entering the Digital Health Accelerator Space

The “Internet + Healthcare” model, representing the future trend, will attract numerous pharmaceutical companies to join the fray. In this intense competition, traditional firms will be eliminated; only those pharmaceutical companies that successfully transform and dare to adopt new technologies can maintain their lead and emerge victorious.

Which internet-enabled technologies and applications hold the greatest strategic significance for pharmaceutical companies? VCBeat draws on a global survey conducted by PwC to illustrate this. The PwC report points out that over the next five years, pharmaceutical companies worldwide will undergo industrial transformation, making significant strides from traditional pharmaceutical manufacturing into the high-tech, new-technology realm of internet healthcare. Future hotspots include internet-based technologies such as social media marketing, data mining and analytics, privacy and security, mobile app technology, open app technology, and web-based transmission products and services (see figure below).



StartUp Health, a healthcare accelerator based in New York, has also conducted relevant survey and analysis. The results indicate that since 2010, the top three investors in the digital health sector have been Merck’s Global Health Innovation Fund, Blue Cross Blue Shield, and Qualcomm Ventures, representing the pharmaceutical, health insurance, and mobile technology industries, respectively. It is estimated that over the next five to seven years, total investment in the healthcare IT (HIT) industry across 22 countries worldwide will reach $500 billion.

Major pharmaceutical giants are actively exploring multi-dimensional approaches to leverage “Internet Plus” (for more details, please read the VCBeat report:Analysis of the Internet Healthcare Strategies of Pharmaceutical Giants, 2010–2014) including the independent development of mobile apps with diverse functionalities and strategic significance, establishing close collaborations with other digital health startup teams, and additionally, making direct investments in or participating in the accelerated incubation of startups in related fields. Building proprietary accelerators or partnering with specialized ones to early on identify startups with market foresight and pioneering capabilities has become a crucial approach for pharmaceutical giants to seize technological opportunities at the earliest stage. VCBeat’s Internet Healthcare Research Institute has compiled and analyzed detailed information on the top 10 multinational pharmaceutical giants’ self-built or collaboratively engaged healthcare technology startup accelerators.

The table below outlines how major pharmaceutical giants are accelerating their strategic layouts in the internet healthcare sector. (Click to view a larger image.)



A Quick Look at the Internet Healthcare Accelerator Initiatives of 12 Pharmaceutical Giants

Pfizer Inc.Pfrizer

As the world’s largest pharmaceutical company, Pfizer established Pfizer Ventures in 2004 to focus on emerging enterprises with globally leading technologies, injecting $50 million annually into healthcare innovation companies through private equity investments. It invested in Cydan, an accelerator for rare disease therapeutics, and entered into a strategic partnership with Blueprint Health, serving as a mentor to provide guidance to innovative startups. At the end of 2006, Pfizer announced the establishment of an incubator at the La Jolla Institute to help early-stage biotechnology companies develop. Since 2007, Dr. Polinsky founded the Pfizer incubator TPI and served as its CEO. For five consecutive years, TPI provided $10 million annually to companies within the incubator to support new drug development and address the expiration of several internal drug patents. Additional benefits offered by TPI included access to Pfizer’s expert guidance and facilities. Although Pfizer retained exclusive rights, it allowed third-party valuations and enabled researchers to retain copyright ownership.

In addition, Pfizer invested $10 million in the Scripps Research Institute and, as a project sponsor of the well-known New York Digital Health Accelerator (NYDHA), provided funding for production operations.

In April 2015, Pfizer partnered with AARP to launch a pilot program focused on developing mobile health applications and devices, aiming to meet the needs of middle-aged and older adults.

Pfizer is also actively expanding its collaborations with enterprises in specialized regions and fields, such as establishing a sponsorship partnership in Israel to help address mobile healthcare challenges, and participating in the development of an iOS game for the treatment of Alzheimer’s disease.

Pfizer executive Ms. Mayer stated that Pfizer initially engaged in equity investments but soon discovered that this model was not conducive to integrating with companies’ new technologies. Therefore, to facilitate learning through collaboration, Pfizer now places greater emphasis on investing in promising, high-quality enterprises, thereby also gaining access to cutting-edge information technologies.

Notably, in January 2015, Pfizer China organized an Internet Healthcare Competition for the domestic market to identify high-quality startup teams and seek valuable, in-depth collaborations.

Bayer HealthcareBayer

In 2013, Bayer supported several innovative digital health startups and established a partnership with Healthbox. The Florida-based Healthbox accelerator also collaborated with Blue Shield Insurance. It provided each cohort with 16 weeks of support, investing $50,000 in seed funding for selected companies in exchange for a 7% equity stake.

In 2014, Bayer finally established its own accelerator. VentureBeat reported that Bayer HealthCare was the first pharmaceutical company to launch its own accelerator, targeting startups with “novel software and hardware, as well as technological processes, that improve treatment outcomes and contribute to human health.”

In 2013, Bayer HealthCare selected five startups in Berlin as innovation pioneers and launched the crowdsourcing initiative Grants4Apps. In 2014, the program was expanded into an accelerator, receiving applications from 70 companies and selecting five. The selected companies received a 3.5-month support period, initial funding of $65,000, and exchanged 10% equity. The first batch of companies primarily focused on sensors, mobile tracking devices, and healthcare applications.

Brief Introduction to Products of 5 Companies:

1. Cortium: A wearable sensor that utilizes electrodes to track physiological parameters, including electrocardiogram (ECG) scans, heart rate, respiratory rate, skin surface temperature, sleep patterns, physical activity levels, body position, and movement.

2. PharmaAssistant: Developed the SmartBottles app, providing visual and auditory alerts to remind patients to take their medications.

3. FabUlyze: A wearable device that uses nanosensors to monitor users’ breathing and assess their health status.

4. Parica: Developing a contactless detection system to analyze vital signs, with alerts to physicians in case of abnormalities.

5. CardiMoni: Develop an application to detect heart rate and rhythm irregularities.

BaxterBaxter

With over 80 years of history in the healthcare sector, Baxter reported sales of $16.7 billion in 2014 and employed approximately 65,500 people. The company provides medical experts and patients with solutions for treating complex and challenging conditions, such as hemophilia, immune disorders, infectious diseases, kidney diseases, trauma, and other chronic and acute illnesses. As a diversified global healthcare company, Baxter not only manufactures medical devices but also leverages advanced pharmaceutical and production technologies to serve customers worldwide.

Additionally, as an investor, Baxter collaborates with the New York Digital Health Accelerator (NYDHA) to provide funding and intellectual support for promising new technological products and treatment solutions.

MerckPharmaceuticals

In 2010, Merck & Co., a Fortune Global 500 company, established the Merck Global Health Innovation (GHI) Fund. Leveraging its healthcare ecosystem built over many years, it partnered with medical investment firms to support innovative companies and provide solutions for healthcare challenges. Merck was also a major investor in the accelerator Rock Health, having supported at least 15 startups by 2013. These 15 companies included Adflow Kiosk (offering free heart rate and blood pressure testing), Humedica (weight measurement and data analysis), and Prophecy (modeling and prediction for drug research and development).

In 2012, Merck’s innovation team, Merck Medical Information and Innovation (M2i2), was established to explore the development models and prospects of internet healthcare in collaboration with healthcare professionals, EMR vendors, and startups.

On January 7, 2013, one of its portfolio companies, Patient Safe Solutions, announced a $20 million Series C financing round led by Merck & Co. The software enables hospital nurses to collect up-to-date patient information at the bedside, verify medication prescriptions, and rapidly coordinate with other caregivers.

Merck GHI plans to invest $500 million in healthcare technology R&D for companies worldwide. For emerging healthcare technology companies in continuous development, Merck leverages global resources to provide substantial support to small enterprises, serving as a solid backbone for these businesses.

Located in the heart of central New Jersey, a hub for major pharmaceutical companies, the accelerator Tigerlabs Health provides startups with $20,000 in seed funding, along with amenities such as mentorship, professional workshops, and co-working spaces. Tigerlabs emphasizes its key advantage: proximity to “pharmaceutical industry giants,” including Merck, Johnson & Johnson, Bristol Myers Squibb, Novartis, and Novo Nordisk, which facilitates the dissemination and exchange of emerging technologies.

On April 17, 2013, TigerLabs announced that Merck GHI and New York-Presbyterian Hospital would become its first initial partners.

Additionally, Merck is also an investor in the New York Digital Health Accelerator (NYDHA).

NovartisNovarits

Novartis, a Swiss company, holds a leading position in the fields of innovative drug research and development, eye care, gene therapy, preventive vaccines, and over-the-counter medications. In 2010, Proteus Digital Health—a leading provider of ingestible sensor products and services, with its core technology being the digital health feedback system—obtained exclusive global licensing rights and partnered with Novartis to develop and market sensor products for the organ transplantation field.
In December 2011, they jointly developed a sensor-equipped electronic pill that collects data and wirelessly transmits information to experts, helping physicians monitor the health status of internal organs in advance.

In 2014, it partnered with the European incubator Startupbootcamp, serving as a mentor and one of its earliest pilot clients. Startupbootcamp is a global accelerator with programs in Amsterdam, Berlin, Copenhagen, and other regions. For each program, 10 high-potential companies are selected from 500 applicants. Startups receive €15,000 in seed funding, free office space, three months of support, and sponsorship partnerships valued at €300,000. Statistics show that 85% of Startupbootcamp teams operate successfully, and 70% are ready to raise their next round of financing.

In January 2015, Qualcomm, the San Diego-based telecommunications giant, planned to renew its collaboration with Novartis by jointly establishing a $100 million sponsorship fund for mobile health companies. Meanwhile, Novartis also adopted Qualcomm’s 2net platform to leverage mobile devices for assessing the health status of patients with chronic lung diseases and aiding in disease management. Therefore, Novartis regarded this partnership as highly significant, capable of generating more groundbreaking new application technologies for society.

SanofiSanofi

In October 2011, PositiveID announced the official launch of the iGlucose diabetes management system, sponsored by Sanofi and the AMDA Association.

In June 2012, Cincinnati-based digital health accelerator Innov8 announced the launch of a new accelerator in collaboration with Sanofi and other strategic partners. The Innov8 healthcare accelerator program offers a three-month support period, takes a 6% equity stake, and provides $20,000 in seed funding. The first cohort of selected companies includes:

1. CCM link: Developed the CHARTS app for life and health tracking reminders.

2. Chronic Care Solutions: Transforming the habits of diabetes patients through digital media and social gaming to promote healthier lifestyles.

3. I Feel Great App: Educating patients to reduce medical expenses and prioritize health safety.

4. Business Solutions (Intec Solutions) IT solutions for handling system access requests.

5. MedaCheck: Developing a comprehensive hardware and software solution to address the critical issue of medication adherence.

6. Betterpointment: Leverages machine learning technology to help patients schedule appointments simply and quickly.

7. Innovative applications dedicated to helping people unlock their potential by providing authentic, effective, and user-friendly solutions over the long term to overcome life’s challenges.

GlaxoSmithKlineGSK

In 2012, GSK developed the Stevenage Bioscience Catalyst (SBC), the UK’s first innovative biomedical science park. Strategically located and spanning 95,000 square feet, it provides resources such as laboratories, office spaces, networking areas, and dedicated equipment. The project was jointly funded by six partners, including GSK and the Wellcome Trust, with a total investment of £38 million.。

On March 13, 2012, Infosys Limited announced a partnership with GSK to collaborate in the global consumer healthcare sector, jointly optimizing online operational channels.

In August 2014, Public Health England, GSK, and BUPA jointly discussed the Be He@lthy mobile initiative. This project actively targets chronic non-communicable diseases in underdeveloped and developing countries.

In November 2014, GSK announced that its most successful app was “My Asthma.” Thus, GSK’s foray into mobile medical tools was merely a preliminary effort, comprising six projects. To further advance its initiatives, GSK partnered with the data startup Medidata and sensor manufacturers Vital Connect and AcriGraph to evaluate the practical role of wearable devices in clinical care.

RocheRoche

In February 2013, Genentech, acquired by Roche, also launched new mobile apps in the biopharmaceutical sector. According to TabTimes, Genentech has more than 60 apps available on the App Store. Genentech is also a sponsor of the New York Digital Health Accelerator. The company’s core business involves leveraging human genetic information to discover, research, develop, manufacture, and commercialize pharmaceuticals for the diagnosis and treatment of serious and life-threatening diseases. With a forward-looking perspective, Genentech aims to meet user needs and drive continuous innovation in emerging fields.

In May 2013, Roche and the California Institute for Quantitative Biosciences announced a strategic alliance to provide early-stage biotechnology startups with strategic guidance and financial support.

The New York Digital Health Accelerator (NYDHA) primarily supports early-stage digital health companies, with a focus on advanced areas such as care coordination, patient management, predictive analytics, and workflow optimization. In March 2014, Roche became one of its many sponsors.

AstraZenecaAstraZeneca

In December 2014, OneStart, the world’s largest bioscience and healthcare startup accelerator, announced that it would partner with J&J, GSK, Roche, AstraZeneca, and several other institutional companies in 2015 to provide sponsored support across multiple fields, including therapeutics, diagnostics, software, medical devices, and research tools. Finalist companies will be granted free access to laboratory space in May 2015 and awarded cash prizes: €100,000 for European teams and $150,000 for U.S. companies.

DigitasLBi and AstraZeneca jointly established the Digital Innovation Group (DIG), a laboratory dedicated to developing cutting-edge mobile devices and proposing innovative healthcare concepts. Its first-generation product, DoctorsNotes, is designed to help medical experts purchase, discover, and share medical research papers.

Johnson & JohnsonJ&J

In 2013, Johnson & Johnson Innovation awarded $50,000 each to two companies conducting research in the fields of Alzheimer’s disease and cognitive disorders. The support package also included office and laboratory space in San Francisco, as well as access to expert mentorship from the team at the J&J Innovation California Center. Johnson & Johnson Innovation comprises four accelerators: the first in San Diego, the second in Boston, the third in South San Francisco, and the fourth in San Francisco, with a fifth planned to launch in Houston in 2016.

In October 2014, J&J established a new team called Johnson & Johnson Health Innovation (JHI), deeply engaging in the field of internet-based pharmaceutical innovation. It developed the Care4Today product, which reminds users to take their medications on time and donates to charitable causes for each reminder. JHI’s California Innovation Center is composed of four divisions, with the other three located in Boston, Shanghai, and London, respectively.

Abbott Laboratories

In 2013, The Iron Yard, an internet healthcare accelerator based in Southern California, was established. Its official website stated that it “only supports software-only or software-hardware integrated companies, and does not favor medical device companies or those engaged in basic life sciences research.”

Selected companies will receive $20,000 in seed funding in exchange for 6% equity. In addition to financial support, they will be provided with office space and employee dormitories. Although the program lasts only three months, participating companies may utilize the office facilities for a full year.

Eli Lilly and Company

In 2014, WellDoc, the earliest and most well-known mHealth company specializing in diabetes management, collaborated with Eli Lilly, Lilly, Merck, and Sanofi to jointly develop a mobile app.

In July 2014, Accelerator Corporation secured $51.1 million in funding to provide research opportunities for emerging biotechnology companies in New York and Seattle. The investment came from a consortium of investors, including prominent corporations such as Eli Lilly and J&J.