Investors gathered in New York on May 9 to discuss the state of financing for women's health companies. The consensus was that innovation in this space has advanced but remains critically underfunded.
Insufficient financial support was among the main themes of the New York Stock Exchange and Supernode Ventures' Women’s Health Investor Summit 2023. Here are five takeaways from the event:
1. Interest is growing
Dr. Alice Zheng, principal at venture firm RH Capital, manages the second-largest fund dedicated to women’s health startups. Hundreds of new companies have entered this area over the past several years, Zheng said. “There’s a huge explosion in the amount of innovation that’s happening,” she said. And companies are looking beyond reproductive health, she said. States looking to use Medicaid to address social determinants of health also is inspiring startups, said Daisy Wolf, investment partner at venture capital firm Andreessen Horowitz.
2. Investment is lagging
Just 1% of healthcare research funding, not counting oncology, is devoted to women's health, McKinsey & Co. reported last year. The stigma associated with women's health issues discourages some patients from raising questions to medical providers, which influences demand, said Sarah Wu, senior associate at the venture capital investment firm Emerson Collective. Some investors and founders also overestimated how much women were willing to pay out of pocket, she said. Accordingly, Zheng said, investors may be reluctant to back companies that rely on patients paying cash rather than those that obtain insurance coverage for their products and services.
3. Reimbursement and return on investment matter
Women’s health entrepreneurs must consider payment and paths to investors earning returns when making business plans, said Dr. Christina Jenkins, a venture partner at Phoenix Venture Partners. These factors are more important at a time when funding is harder to attract, she said. Dr. Jennifer Levin Carter, venture partner at Sandbox Healthcare, emphasized that companies must also understand how regulations on women's healthcare services can affect their offerings.
4. Research is lacking
Thirty years after policy changes required women to be included in research that the National Institutes of Health funds, the problem persists, conference speakers agreed. According to a study published in the journal Obstetrics & Gynecology last year, only 11% of NIH dollars underwrite research on women's health.
5. Menopause is an opportunity
Konstantina Katcheves, senior vice president of business development at Bristol Myers Squibb, said the pharmaceutical company is eyeing menopause as the global population ages. Samsung’s venture capital arm also is considering investments in this area, said Jonathan Machado, a managing director. About 100 startups are now developing menopause interventions, Zheng said.