Boston, known for its world-class universities, healthcare and life sciences, is an accessible harbor city north of New York, surrounded by the Charles River and facing the Atlantic ocean. The place has incubated countless startups and led them to the world stage – of particular interest is its health technology industry. On our list, 12 startups are located in Cambridge, where Harvard University and MIT are based, providing endless scientists, researchers and professional development.
Health Tech, or health technology, is defined by the World Health Organization as the "application of organized knowledge and skills in the form of devices, medicines, vaccines, procedures, and systems developed to solve a health problem and improve quality of lives." Health Tech is mainly divided into four categories: digital health, medical devices, biotech & pharma and IT services.
Digital health is the convergence of digital technologies with health, healthcare, living and society to enhance the efficiency of healthcare delivery. The total global mHealth market is predicted to reach nearly 100 billion US dollars in 2021.
Different from digital health, medical devices provides professional medical instruments for the industry. Significant potential hazards are an inherent concern when using a device for medical purposes. Several reports with names like 'medical device recall' can be found on Statista. It's obvious that this area needs more professional attention and high-tech skills to generate qualified devices.
Then comes the largest share part of the 20 valuable health technology startups: Biotech & Pharma. Biotech means using live organisms for multiple purposes from drug development to research, while pharmaceutical research means creating medicines from synthetic research. This combined sector covers over 90% of startups in Boston. All companies in our list have over USD 100 million in total funding amounts and attracted their investors during the past two years. Startup Generation Bio just got funding one month ago and is one of two companies that have over USD 200 million funding amounts.
The IT service in this industry provides infrastructure and software for healthcare providers. Concerto HealthAI is using AI technology to accelerate insights into clinical variability, patient outcomes, and clinical research. Besides AI, other technologies such as big data, cloud computing and blockchain are attractive internationally and investors are following suit.
We select 20 valuable startups based in Boston founded after 2012. Among these 20 potential startups, digital health and medical devices take 1 respectively, biotech & pharma takes 17, and the last one belongs to IT service.
Digital health mainly uses apps or platforms to digitize traditional healthcare services for patients. Sometimes it's called mobile health, or mHealth for short. Digital health has many hardware support devices, and thanks to the wide use of mobile phones, the technology is increasingly accessible and portable for users. According to grand view research, the mHealth market size will be worth USD 316.8 billion by 2027, with a CAGR of 29.2%. This potential market attracts players to come in, such as pear therapeutics, providing better patient outcomes, clinical smarter engagement, tracking tools, and cost-effective payment solutions. They announced to partner with Apricity Health to advance digital therapeutics with Immuno-oncology therapy.
Medical devices can vary a lot, from simple, low-risk devices such as medical thermometers and disposable gloves, to high-risk devices that are implanted and sustain life. Higher supervision and control are needed for high-risk devices. According to Statista's report, the number of medical device recalls raised from 2,303 to 3,202 from 2013 to 2017. The biggest reason is medical design. While the recalls are not low, this huge market still attracts investors and startups, since the United States remains the largest medical device market in the world with USD 156 billion (40 percent of the global medical device market in 2017).
Under the high supervision of the FDA (US food and Drug Administration) and the possibility of recalls, one company, Beta bionics, stands out. Two months ago, they received a breakthrough designation for their device called iLet. It can autonomously adapt to an individual patient's changing insulin needs to treat type 1 diabetes.
Biotech & Pharma
Here comes the really trending sector in the Great Boston Area. Among 20 valuable health tech startups, 17 belong to it, including the unicorn named Relay Therapeutics. It's evaluated between USD 1 billion to USD 10 billion and generated total funding of more than USD 500M. Relay Therapeutics has the premise of putting protein motion at the heart of drug discovery – the procedure can be seen as a movie called protein. We previously only saw one picture of it, but now we can see the whole video. And during different times in the movie, protein's function is different. So this company is trying to understand the whole story to create medicine, where medicine created before was based on one picture.
The pharma sector covers startups focused on many detailed disease areas such as metabolic disease and pain relief. A company that focuses on cancer patients is named Oncologie – it is one of two companies on the list which has hit lower than USD 100 million since it's the only one that has a branch office in China, a potential health tech market. Besides cancer, other diseases that bother humans are also raising attention. Metabolic disease treatment is being researched by Inozyme Pharma. Tumor and immune drug markets have seen a new player named KSQ Therapeutics. Chronic pain meanwhile, troubles over 1 billion people and Centrexion aims to ease their burden. This company got the third-most total funding amount of over USD 182 million two weeks ago. And Arrakis Therapeutics wants to cover more areas – it focuses on neurological diseases, cancer and rare genetic diseases.
And another company called Lyndra Therapeutics hooses to focus on the pills we take to reduce side effects and improve drug efficacy. It announced that the pills can stay in our body for one week and release medical effects continuously and steadily.
Gene therapy focuses on genes to correct or compensate for diseases caused by defects and abnormal genes. According to the grand view research, the gene therapy market will be worth USD 5.55 billion by 2026 with a CAGR of 33.9%. Three companies on the list go deeper in this sector.
An attendee of JP Morgan's annual healthcare conference, after which it generated USD 235 million in funding, Generation Bio's most advanced programs are for the blood disorder hemophilia A and phenylketonuria (PKU), an inherited metabolic disorder. While another company called EGenesis is interested in the field of transplantation with a multiplexed gene-editing platform. Three months ago, it landed USD 100 million to advance CRISPR-ed pig kidney to human testing. Deeper in the gene world, Foghorn Therapeutics wants to tell us what is controlling our genes and may find unexplored causes of disease. It expanded its leadership team last year and their company size doubled during the past two years.
Cancer is well known as a killer and has more than 100 kinds. One in five deaths in the United States is due to cancer, and the number is 100-350 / 100,000 worldwide annually. As with genetics, four companies on the list focus on this area. People care more about genes and cancer since these two categories gather the most startups.
First, if cancer can be found at an early stage, doctors and patients will have much more time to cure and the patients more possibility of surviving. And one company, called Thrive Earlier Detection, is developing CancerSEEK, a blood-based test that can detect multiple types of cancer at earlier stages. It's the most recently funded startup on the list and is receiving in total USD 110 million in funding. So here comes the next step, the treatment method. Oncorus is driving innovation to deliver a portfolio of next-generation, best-in-class oncolytic virus therapies. Last August, it added USD 79.5 million to steer a cancer-fighting virus to human testing. In the same year, Compass Therapeutics presented at Piper Jaffray 31st Annual conference and last year, it attended JP Morgan's annual healthcare conference as well. They are developing highly effective, precisely targeted therapies for cancer and autoimmune diseases. Moreover, startup Ribon Therapeutics raised the idea that they're trying to block the fundamental ability of cancer cells to survive under stress.
Besides cancer and gene area, other areas, such as cell therapy and kidney disease treatment, also raise startups' interest. Armon Sharei, chief executive officer of SQZ Biotech, said 2020 is going to be an exciting year for the company, as it can access clinical data from its first trial and they received approval from the FDA for cellular immunotherapy experiments. Different from SQZ biotech, Goldfinch Bio is discovering and developing kidney disease treatments and has attended the 38th Annual J.P. Morgan Healthcare Conference.
There is only one company called Concerto HealthAI on the list that provides IT services for healthcare technology in Boston. It can be seen as an accelerator for both researchers and healthcare providers such as hospitals and clinics. AI can be used in a wide range of applications, from post-approval studies, clinical research to patient outcomes.