Seth Bogner, Chairman & CEO of Heartpoint Global, has more than three decades of experience in principal investing and structured finance.
According to the American Academy of Pediatrics, congenital heart defects are the most common birth defect in the world. One in 4 babies born with CHD needs intervention in the first year of life to survive. But in India, only 1 in 10 have access to quality lifesaving care. Inadequate pediatric research and limited access to medical care are not only prevalent in developing countries but also in the United States, where affordable and preventative healthcare has yet to be made universally available, necessitating individuals to advocate for their health. Evidence is growing in favor of private-sector approaches that are relevant for improving child health outcomes.
With high mortality rates and the sobering reality that there are so many barriers to entry in developing and funding devices for this age group, the private sector can make a profound difference by spending money on clinical pediatric research and involving private healthcare providers to improve healthcare access and higher levels of care. As the CEO of a company that provides medical solutions for cardiac care, I believe it will take a collective effort among healthcare providers, advocators, regulators and government bodies to work together to advance this process.
The good news is we’re already seeing an increase in private-sector involvement, and it’s had an impact on everything from regulation and accreditation to social marketing and social franchising to the use of vouchers and pre-packaging of drugs. And while I’m happy to see progress is being made, there’s still more work to be done. Not only should private healthcare providers get more involved, but also private investors. I just attended the Cardiovascular Research Foundation TCT conference, where the Food and Drug Administration (FDA) presented. Representatives from the organization said they are encouraging companies working on pediatric solutions to collaborate with them early and often to accelerate the approval process.
For investors, providing capital for pediatric medical device development allows them to advance treatment options for children as products evolve based on more sophisticated tech developments. This also enhances the well-being and health of adults with access to early intervention. From a business perspective, there is a pronounced global need with great potential for market expansion.
Funded by the FDA, the West Coast Consortium for Technology & Innovation in Pediatrics (CTIP) believes that the pediatric medtech sector can generate “excellent investment opportunities.” In 2019, they declared that “the United States is the largest market for pediatric medical devices whose growth is attributed to an increase in the incidence of chronic diseases such as heart disease, diabetes, and obesity, increasing awareness about adolescent health and behavioral health and increasing the demand for medical devices in pediatric hospitals and clinics.”
With that in mind, here are a few key considerations for investors thinking about opportunities in the pediatric sector:
Identify your passion.
While pursuing profitability in medtech investments is undoubtedly a pivotal objective, it need not be the sole driving force. Discovering a company that profoundly resonates with your convictions and envisions addressing challenges that align with your aspirations of alleviating human suffering confers a distinct advantage for medtech investors. It is prudent to start by delving into diseases or conditions that hold personal significance and looking for companies that are pioneering medtech solutions within this domain. Seek out founders and board members whose ardor for their undertaking is palpable, underscoring a personal commitment to the cause.
Rigorously vet opportunities.
Given the high stakes that come with medical investments, investors can vet various opportunities by ascertaining whether the medtech enterprise they contemplate investing in addresses a pressing, unmet market need. This necessitates a thorough exploration of the market landscape, identifying areas of unexplored potential and subsequently pinpointing companies committed to resolving these issues.
It is imperative to scrutinize whether the prospective company possesses a distinctive value proposition that empowers it to tackle this challenge. An informed examination of the company’s research and development (R&D) capacities is a reliable gauge of both the sophistication and robustness of the product under development and the degree of innovation inherent in the organization. An equally crucial aspect to consider is the composition of the medical and scientific staff and the board of directors. Opting for a company whose staff and board are meticulously tailored to the specific demands of the endeavor is also a high priority.
Consider potential hurdles.
Prospective investors must also be aware of potential hurdles, including government red tape and delays that may prolong the time it takes to see a return on investment. A prudent approach to medtech investment necessitates a comprehensive understanding of the protracted journey that medtech enterprises traverse in bringing a device to market, encompassing stages of product development, rigorous scientific and clinical inquiry and the intricate regulatory pathways requisite for securing FDA endorsement.
In the realm of pediatrics, the development of pediatric devices is frequently constrained by regulatory thresholds. Constrained by smaller sample sizes and demographic diversity, securing adequate safety data for regulatory submissions can also take more time. Additionally, ethical considerations are paramount, yet often can slow the process, particularly in ensuring the safety of testing procedures for children. It is incumbent upon investors to seek out companies equipped with a proficient clinical research organization (CRO) partner capable of expediting both the clinical and regulatory strategy, thereby expediting the pursuit of FDA approval.
Of course, dedicating resources to developing pediatric medical devices is not merely a financial opportunity but a chance to positively impact the lives of countless children globally. This undertaking requires a collaborative effort with healthcare providers, regulators, nonprofits and governments uniting for the common good. Together, we can lower barriers, enhance accessibility and foster innovation in pediatric healthcare.
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