Is Bioelectronic Medicine the Next, Next Thing for Big Pharma?

Oct 31, 2017

Is Bioelectronic Medicine the Next, Next Thing for Big Pharma?

Healthcare IT, Healthcare Newsletter 0 Comments

Dear Clients and Friends,

Please click here for our October HIT Market Update.

According to PhRMS, it takes 10 years and $2.6 billion to bring a drug to market and only two out of ten approved medications produce revenues that exceed their R&D costs. Many expect the picture to worsen in the coming years. Perhaps it is time to invest less in chemical engineering and pay more attention to bioelectronic medicines.

The vision for bioelectronic medicines is one of miniature, implantable devices that can be attached to individual peripheral nerves. The nervous system is essentially the body’s electrical and communication systems that wires together all the nerves and organs starting at the brain and branching out to every other part of the body.

In 2016 Glaxo Smith Kline (GSK) and Verily Life Sciences, the healthcare division of Alphabet, committed $750 million to form Galvani, the first significant initiative to build a new class of bioelectronics medicines. The aim is to marry deep understanding of biology with expertise in chip design, software and data analytics to produce more effective treatment at lower cost and faster time to market. Given the progress made to date, experts believe that in the next decade, bioelectronics can become central treatments in a host of major chronic diseases such as diabetes, asthma, hypertension, arthritis, Alzheimer, Parkinson and even cancer. Many startups are now pursing the same goal.

If the dream of bioelectronics becomes a reality, imagine what the future could hold for the pharma industry. Would we see more joint ventures and big bets like Galvani? Possibly – but there are only so many large tech companies that are willing to venture into uncharted waters. Instead we expect bioelectronics to evolve along a path similar to that of biotech industry where, aided by substantial amounts of VC money, smaller and more nimble companies do the early stage development, and then sell to large pharma companies.

This new class of medicine has the potential to materially change the economics of the pharma industry where the largest companies pivot to become distribution arms for bioelectronics medicines. In that mode, pharma needs fewer scientists but more IC and software engineers. So next time you see a wanted ad by a pharma company looking for top IC engineers, we can assure you that is not a typo.

Read more from our October 2017 HIT Update here.

Sincerely,

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