Venture Valkyrie’s Lisa Suennen: ‘Medtech is complicated’

16 Nov 2018

Venture Valkyrie’s Lisa Suennen. Image: Venture Valkyrie

Ahead of her appearance at Medtech Rising in Cork, seasoned medtech investor Lisa Suennen speaks candidly about the health problems of the medtech and healthcare world.

Lisa Suennen doesn’t mince her words about the real challenges facing medtech and the overall pharma and life sciences industries. She knows the opportunities, but she also knows where the problems lie. In fact, seeing through a lot of the hype is something she excels at as an investor.

“I think the sentiment of investment is moving back towards science-based start-ups,” Suennen said as we spoke about the unicorn bubble and the general mood around Silicon Valley. “I think there is a large amount of money and attention going into life sciences start-ups that are more biotech and pharma-focused.”

‘You can help somebody understand they have diabetes and you can give them insulin, but if they cannot afford the electricity to keep it refrigerated it doesn’t matter’

She continued: “On the health IT side, a lot of the unicorn activity was going on. There still remains a fairly large amount of interest but there is some concern that they will be difficult to sustain and if the stock market continues to add pressure and there is any difficulty in the economy, this will be problematic.”

Suennen’s perspective is worth noting. She has spent more than 30 years as entrepreneur, venture investor, board member and strategy advisor in the healthcare field. Up until earlier this year, she was the senior managing director at GE Ventures’ healthcare venture fund. She has just started her own business, Venture Valkyrie.

It emerged earlier this week (12 November) that Suennen has joined Manatt, Phelps & Phillips LLP as the head of its digital and technology businesses and the firm’s venture capital fund.

Suennen’s medtech star is rising

Suennen will be speaking at the 2018 edition of Medtech Rising: The Irish Medtech CEO Conference, which is due to kick off for two days on 5 and 6 December in the Rochestown Park Hotel, Cork, and will be attended by more than 500 industry professionals.

As an investor and adviser, Suennen focuses broadly across the areas of healthcare IT, healthcare services, medical technology and life sciences, especially at the intersection where these fields converge. As she says herself, she is on a perennial quest to find methods of aligning incentives and improving value-creation in the healthcare field.

She is also founder of CSweetener, a not-for-profit company focused on matching women in and nearing the healthcare C-suite with experienced mentors. She is also on the advisory boards of the California Health Care Foundation Innovation Fund, the American Heart Association Innovation Think Tank, global digital health organisation HealthXL and NASA’s Translational Research Institute, which is focused on innovative approaches to reduce risks to humans on long-duration exploration missions, including the journey to Mars. In 2018, she was appointed by California governor Jerry Brown to the advisory council of the state’s Initiative to Advance Precision Medicine.

In 2018, Suennen was named Top Digital Health Evangelist by Goldman Sachs, Rock Health and Silicon Valley Bank. The fund she led at GE Ventures was named the Most Prolific Corporate Venture Fund in the category. In 2018, she was also named No 2 in the Global Corporate Venturing list of 100 Rising Stars.

On the subject of investing in medtech in the current economy, Suennen is cautious. “It is really the greater economic situation. I still think there is quite a lot of froth and fervour around these high-flying unicorn companies, but whether that is a good thing for investors remains to be seen.”

But what makes medtech exciting for Suennen? “Medtech is very complicated because, for traditional medtech and for things that require extensive clinical trials and approval from the FDA, for example, it has been challenging. Among earlier-stage firms there is a lot of interest in digital and medtech integration using digital technologies to bring about the next generation of medical device products. There is a lot of interest in digital therapeutics and diagnostics and digitally enabled devices.”

In terms of where the activity is happening on the global stage, Suennen is clear that there are two dominant players. “In general, the vast majority of innovation and funding is coming out of the US and China right now. And while there are pockets where there is a lot of activity – like Ireland or the Netherlands – the big financial investments being made are still in the US and now much more so in China, which is investing massively in the life sciences, medtech and digital technology for healthcare roles.”

Avoiding fads and fixing stuff that matters

This brings us to the rise of medtech as an app or gadget fad amongst consumer tech giants like Apple, which recently put an ECG monitor on its flagship smartwatch, the Apple Watch 4.

“I don’t think a lot of people are going to buy the Apple Watch because of the ECG function. They will buy it because it is an Apple Watch. It still has to be approved for use for people with atrial fibrillation issues. But, of course, there is a small class of people who worry about their health a lot when they are generally healthy. But it is still rare for most people to think about their health proactively in a way that they will spend a lot of money on it,” she advised.

Suennen doesn’t believe there is a huge market for consumer healthcare technology products, unless you are talking about electronic toothbrushes or beauty products that don’t require insurance pay-outs.

“There is large interest among the tech companies to create products for business use in healthcare and it wouldn’t surprise me if Apple spent a large amount of energy marketing that product to physicians. But it is not the same as consumers rushing to buy products to proactively manage their health.”

Crucially, what has arrested Suennen’s attention the most is the misalignment in healthcare provision in various economies.

“In the US especially, if you are a patient you are not financially aligned with your insurance or physician about what gets done. Most health systems are incentivised to do more things than are necessary. Health insurance plans are incentivised to cover less things than are necessary and consumers are incentivised to put off until the last minute whatever they can health-wise to avoid paying things out of pocket. They aren’t the ones paying most of the expenses, so they don’t think hard about the costs of things a lot of the time. So, I feel that especially the economic misalignment is really great for some bad decision-making and bad behaviour in healthcare.”

So, if you can’t afford healthcare you are screwed? “Even if you have a lot of money you could have problems. Just because you can afford something doesn’t mean it works. So I think consumers are at a real disadvantage knowledge-wise, information-wise and financially, and they do little to fix that.

“Also, 60pc to 70pc of the things that happen to you health-wise are not because of a medical situation but your personal socio-economic situation. Whether you can afford healthcare, have transportation, can get to care, have reliable housing, childcare, food – there’s a lot of other issues. Many of these things are linked to poverty. You can help somebody understand they have diabetes and you can give them insulin, but if they cannot afford the electricity to keep it refrigerated it doesn’t matter.”

We close our conversation on Suennen’s work with CSweetener and the subject of women leadership in medtech, pharma and life sciences. Suennen said the situation is just as bleak, if not worse, in these industries than in IT.

“In the US, about 85pc of all healthcare jobs are held by women and just 2pc of the CEO positions are held by women. If you get to director or mid-level management, women have dropped way off the page. It is not only because women have children, but the patterns of promotion and pay are so divergent for men and women. It is a really serious problem in healthcare,” she warned.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years