Investor Series: Opportunities in Digital Therapeutics Market

Investor Series: Opportunities in Digital Therapeutics Market

Digital therapeutics are clinically validated solutions that are delivered as applications, software and online programs, demonstrating the capability to facilitate positive outcomes when employed in the management of clinical conditions. These therapeutics are designed to engage patients in personalized treatment or disease prevention programs, through mediating behavioral or psychological modifications. The primary benefits of digital therapeutics include reduction of treatment related costs, generation and maintenance of personalized health data, reduction in stress amongst healthcare professionals, and increase in the adherence to prescribed treatment regimens. In addition, these digital health solutions provide motivational support and inculcate healthy lifestyle changes in the target patient population. Currently, a wide variety of digital health applications and intuitive software are available for the aforementioned purposes. In fact, the COVID-19 pandemic has created a significant demand for remote healthcare solutions. Amidst other alternatives, digital therapeutics have emerged as a promising option since these can be employed as preventive or curative digital solutions for managing diverse target indications. A recent survey highlighted that the percentage of patients adopting digital therapeutics in the US rose from 4.7% to 18%, post the pandemic outbreak, resulting in an increased prescription rate of such therapeutics. Presently, there are more than 40 USFDA approved digital therapeutic solutions available in the market, including apps, software and devices, for the management of numerous therapeutic areas, such as mental health disorders, substance use disorders and reproductive health. , It is worth noting that reSET, developed by Pear Therapeutics, was the first prescription digital therapeutics that received the USFDA approval in 2017. The application can be used as a method of opioid replacement therapy, increasing a patient's abstinence from substances of abuse during the treatment and enhancing the outpatient treatment program retention. ,

Owing to the increased adoption rate of digital solutions and rise in the demand for remote healthcare services, the companies involved in the digital therapeutics domain have witnessed a surge in the investment activity, with capital investments worth more than USD 9 billion. According to the recent trends, various digital therapeutic companies are engaged in providing personalized solutions, along with remote access to medical care facilities, including a health coach. Further, taking into consideration both the historical and contemporary scenarios, we believe that the digital therapeutics market presents lucrative investment opportunities for both short and long-term investors.

1.1. SCOPE OF THE REPORT

The Investor Series: Opportunities in the Digital Therapeutics Market (Focus on Need for Digital Therapeutics, Market Landscape of Innovators, Analysis of Product Offerings and Affiliated Value Propositions, Insights from Historical Funding Activity, Company Health Indexing, Financial Analysis of Key Public Ventures, Market Forecast and Opportunity Analysis, Insights from Publicly Disclosed Investor Exits and Key Acquisition Targets) report provides detailed information on the digital therapeutics market, covering the core and peripheral digital therapeutics solutions. It offers a technical and financial perspective on how the opportunity in this domain is likely to evolve, in terms of future business success, over the coming decade. The information in this report has been presented across multiple deliverables, featuring MS Excel sheets (some of which include interactive elements) and an MS PowerPoint deck, which summarizes the key takeaways from the project, and insights drawn from the curated data. The report features the following details:

A qualitative and quantitative (wherever information was available) perspective on the current need for digital therapeutics, highlighting some of the key applications of such offerings. Further, it highlights various challenges faced during stages of drug discovery, and the opinions of representatives from key stakeholder companies involved in this domain.

A detailed analysis of digital therapeutics focused companies that were established post 2005, featuring inputs on observed trends related to basic input parameters, such as year of establishment, location of headquarters, company size, and type of venture.

A quantitative perspective on the relative health (based on basic company details, product details, financing activity, and estimated revenues and profits) of the different innovator companies that have been described in detail in this report. This analysis is based on a proprietary scoring criterion, informed via secondary research.

An assessment of the various solutions, offered by the companies mentioned above, featuring analysis based on number and types of products, and an informed perspective on the value of the offerings based on multiple relevant aspects, namely outreach-related value offered, developer-related value, value to patients and product-related value.

A company competitiveness analysis, which offers a quantitative basis for comparing the strengths / contributions of various industry stakeholders that are involved in providing digital therapeutic solutions, captured in this report. It is worth mentioning that this analysis is based on the insights generated from the abovementioned relative health indexing and value proposition analyses.

A detailed analysis of the funding and investment activity that has taken place in this domain, since 2011. It also includes financing category-wise trends, describing the relative maturity (in terms of number of funding instances and total capital raised) of the innovator companies discussed in the report. Further, it features a list of the leading investors in digital therapeutics, based on their participation in financing activity in this industry segment.

An elaborate review of the overall digital therapeutics market from a financial perspective, including detailed fundamental (insights from the balance sheet, and key financial ratios) and technical analyses (insights from historical and recent stock price variations, and analysis using popular stock performance indicators) of financial data of the publicly listed companies within the market landscape dataset.

A business risk analysis, based on some of the major categories of risk that are usually discussed in the industry, namely operations-related risks, overall business-related risks, financial risks, product / technology associated risks, and social, economic, environmental and political risks.

Case studies of instances where investors have exited various digital therapeutics related ventures, offering insights on return on investments made (based on availability of data). Leveraging the abovementioned details, the report offers an informed opinion on the future outlook for investors in the digital therapeutics market.

A key acquisition targets analysis, based on the insights generated during the course of this study, highlighting some of the promising early-to-mid stage business ventures around which there is likely to be interest for future acquisitions / mergers.

One of the key objectives of the report was to identify the primary growth drivers and estimate the future growth opportunity associated within the digital therapeutics market, over the coming decades. We have provided informed estimates on the likely evolution of the market, during the period 2023-2035, based on various parameters, such as historical sales, target patient population, likely adoption rates and expected pricing. Our year wise projections of the current and forecasted opportunity within the digital therapeutics market have been further segmented across type of solution (standalone software application, combination offerings of software application + device, combination offerings of software application + AI support , combination offerings of software application + personal coach, combination offerings of software application + device + AI support , combination offerings of software application + device + personal coach and others), type of therapy (curative solutions and preventive solutions), therapeutic area (cardiovascular disorders, chronic pain, mental health problems, metabolic disorders, neurological disorders, respiratory disorders, sleep disorders, substance use disorders and others), and geographical regions (North America, Europe and Asia-Pacific and Rest of the World). In order to account for future uncertainties in the market and to add robustness to our model, we have provided three forecast scenarios, portraying the conservative, base and optimistic tracks of the market’s evolution.

All actual figures have been sourced and analyzed from publicly available information forums and primary research discussions. Financial figures mentioned in this report are in USD, unless otherwise specified.

1.2. RESEARCH METHODOLOGY

The data presented in this report has been gathered via secondary research. For all our projects, we conduct interviews / surveys with experts in the area (academia, industry, and other associations) to solicit their opinions on emerging trends in the market. This information is primarily useful for us to draw out our own opinion on how the market will evolve across different regions and technology segments. Wherever possible, the available data has been validated from multiple sources of information.

The secondary sources of information include:

Annual reports

Investor presentations

SEC filings

Industry databases

News releases from company websites

Government policy documents

Industry analysts’ views

The insights presented are solely based on our knowledge, research and understanding of the relevant market, as inferred from the publicly available sources of information.

1.3. CHAPTER OUTLINES

EXCEL DELIVERABLE

Spreadsheet I includes details on the companies captured in the report, along with their respective products. It also features proprietary company health indexing analysis, value proposition analysis, insights from a detailed company competitiveness analysis and a list of industry stakeholders that were deemed to be likely targets for mergers / acquisitions, in the near future. The deliverable includes a summary dashboard, featuring interactive graphical representations of key insights generated from the data collated.

Spreadsheet II features a summary dashboard, including interactive graphical representations of some of the key insights generated related to the capital investments made in digital therapeutics domain (since 2011).

Spreadsheet III is a collection of multiple MS Excel sheets that provide summaries of insights generated from a detailed fundamental and technical financial analysis, of publicly listed ventures in the innovator companies’ dataset.

Spreadsheet IV offers our independent perspective on the various types of risks (namely operations-related risks, business-related risks, financial / asset-related risks, product / technology risks, and other risks) that the publicly listed ventures are presently exposed to; it includes a summary heat map representation that provides a pictorial perspective of the diversity and level of risks (as per our opinion), as well.

Spreadsheet V is a summary MS Excel dashboard, offering detailed graphical representations of the contemporary and future opportunity associated with the digital therapeutics domain.

Spreadsheet VI includes publicly available information on the investments made by selected investors in companies that are now publicly listed. Based on the data, we have offered a perspective on likely return on investments received by the mentioned investors.

POWERPOINT DELIVERABLE

Chapter 1 provides a brief summary of the content presented in the report, beginning with the need for digital therapeutics. It goes on to discuss some of the key benefits of these solutions and their advantages over the conventional therapies. Finally, the chapter provides an overview of the current scenario, offering a perspective on how, in light of recent funding activity, the market is likely to evolve over the coming years.

Chapter 2 and 3 feature brief (pictorial) summaries of the key objectives and approach used for data collection and analysis, in this study.

Chapter 4 features an executive summary of the key insights generated from the data and analytical outputs presented in the report.

Section I: Need for Digital Therapeutics and Innovators Landscape

Chapter 5 describes the current need for digital therapeutics, highlighting the key facts about the origin and development of digital therapeutics. It features information on the current areas of innovation, along with opinions of experts, describing various benefits of these therapies, and anticipated future challenges. It includes information on some of the key players that are engaged in this domain. The views presented in this chapter are backed by inputs from representatives from key stakeholder companies in this domain (as stated in publicly available articles and interview transcripts).

Chapter 6 focuses on some of the innovators (companies established on or after 2005) and features detailed analysis of the companies. It highlights important company related details, such as year of establishment, headquarters, company size, and type of venture.

Chapter 7 includes information on the various products and affiliated services offered by the companies captured in the report (listed in Chapter 6). It also features analysis based on number and types of products. Based on the insights and details presented in Chapter 6, we have developed a quantitative perspective on the relative health (based on basic company details, product details and financing activity) of the different innovator companies.

Chapter 8 offers an informed perspective on the apparent value proposition of the companies captured in the report (listed in Chapter 6). Based on multiple relevant inputs (as inferred from publicly disclosed value statements), namely outreach-related value offered, developer-related value, value to patients and product-related value, we developed an empirical framework to quantify the value proposition of a business.

Chapter 9 features a detailed company competitiveness analysis, offering a quantitative basis for comparing the developer of digital therapeutics captured in this report. It is worth mentioning that the analysis described in this section is based on a proprietary scoring criterion, which was informed via our company health indexing.

Section II Analysis of Investments

Chapter 10 offers insights from a detailed analysis of the funding and investment activity in this domain, since 2011. It includes financing category-wise trends, describing the relative maturity (in terms of number of funding instances and total capital raised) of the innovator companies discussed in the report.

Section III Financial Analysis and Assessment of Business Risks

Chapter 11 is modelled in the likeness of an equity research report. It features a review of the overall digital therapeutics market from a financial perspective and includes detailed fundamental (insights from the balance sheet, and key financial ratios) and technical analyses (insights from historical and recent stock price variations, and analysis using popular stock performance indicators) of financial data of nine of the publicly listed companies within the innovator landscape dataset.

Chapter 12 includes detailed profiles of the public ventures engaged in the development of digital therapeutics. Each profile features a brief overview of the company, its insight from balance sheet (if available), details on its management team, a section on recent developments and key financial details (including company investment highlights, company fundamental and company technical analysis)

Chapter 13 includes a business risk analysis, offering insights encompassing several known categories of risk; these include operations-related risks, business-related risks, product / technology risks, financial / asset-related risks, and other risks.

Section IV Market Forecast and Opportunity Analysis

Chapter 14 features an insightful market forecast analysis, highlighting the estimated current and future size of the overall digital therapeutics market, till the year 2035. The opportunity has been segregated on the basis of type of solution (standalone software application, combination offerings of software application + device, combination offerings of software application + AI support , combination offerings of software application + personal coach, combination offerings of software application + device + AI support , combination offerings of software application + device + personal coach and others), type of therapy (curative solutions and preventive solutions), therapeutic area (cardiovascular disorders, chronic pain, mental health problems, metabolic disorders, neurological disorders, respiratory disorders, sleep disorders, substance use disorders and others) and geographical regions (North America, Europe, Asia-Pacific and Rest of the World.

Section V Analysis of Returns on Investment and Key Acquisition Targets

Chapter 15 includes case studies of instances where investors have exited various digital therapeutics-related ventures, offering insights on return on investments made (based on availability of data). The abovementioned estimates / details, offer a perspective on how past investments have paid off for investors as companies gradually went public, over time.

Chapter 16 offers insights from a proprietary analysis that leverages inputs from the startup health indexing and value proposition analysis (described in Section I), to offer qualitative recommendations on companies that are likely to be perceived as key acquisition targets.

Chapter 17 provides a pictorial summary of the overall project.

Chapter 18 is a set of appendices.