In the vast expanse of scientific discovery, where each breakthrough holds the promise of a better, healthier tomorrow, innovative tools and diagnostics (T&Ds) take center stage in the path towards transforming healthcare.
Last week, aMoon hosted an exclusive gathering to discuss cutting-edge technologies in the tools and diagnostics space, and how they are paving the way for clinical breakthroughs. We brought together key opinion leaders from large strategics to smaller companies, startups, and scientists, for a fascinating evening. Here are our main takeaways:
Conservatism in M&A Strategy
Strategics in T&Ds seem to have an exceptionally conservative approach when it comes to mergers and acquisitions (M&A), heavily favoring profitable companies, or at the very least those with a clear path towards profitability. There is a large focus on the bottom line, with a desire to minimize risk and avoid the potential pitfalls that can come with acquiring struggling or unproven businesses. While this strategy may provide a sense of security, it may also limit opportunities for growth and innovation that arise from investing in emerging or disruptive technologies at earlier stages. It is also worth noting that even when venture arms invest in these companies, the likelihood of the investment culminating in an acquisition remains very low.
Relevance of IPOs
At the peak of the markets a couple of years ago, we saw a wave of T&Ds IPOs, with many early-stage companies (sometimes even pre-revenue) going public at very high valuations. Most of these stocks have since depreciated meaningfully, and the IPO window for T&Ds companies has mostly shut down. Our speakers were at a consensus that companies wishing to go public today will have to show strong product market fit, as well as a strong balance sheet with over $100M in revenues at good margins. This will pose challenges to early-stage companies that may struggle to access enough capital to fuel their development.
Impact of the Spatial Field
Spatial technologies are taking center stage with major progress in our ability to visualize numerous RNA and protein biomarkers simultaneously in tissues at single cell resolution. Until recently, spatial technologies have mostly been used for academic discovery. However, recent breakthroughs in science, together with improved throughput, are transitioning the space into clinical use. Companies such as Akoya Biosciences are working with pharma companies to develop companion diagnostics to better characterize responders to drugs. We believe this space will continue to grow as more use cases are discovered.
Multiomics in Disease Understanding
Our panelists mentioned the need to explore multiomics in both discovery and clinical research. Multiomics refers to the comprehensive analysis of various biological data types, including genomics, transcriptomics, proteomics, and metabolomics. The promise of multiomics lies in its potential to provide a holistic view of complex diseases by uncovering intricate molecular interactions and identifying novel biomarkers. This integrated approach can potentially lead to better disease understanding, early detection, and the development of more precise and personalized therapies. Furthermore, it could contribute to lowering the overall cost of healthcare by improving diagnostics and treatment efficacy.
Thanks to all those who attended and contributed to the insightful discussion on the future of T&Ds in the ever-changing healthcare landscape.