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BFD Expert Voices - Health Tech Deals

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BioPhy, a company that helps enhance the outcomes of clinical trials, raised $4.5 million in pre-seed funding, CEO Dave Latshaw II tells Aaron exclusively.

Why it matters: Clinical trials have only a 7.9% success rate, limiting the chances of curing, preventing, or earlier diagnosis of serious and deadly diseases.

Details: The Philadelphia-based company saw this round of funding led by Metrodora Ventures, a firm led by Chelsea Clinton and Caroline Kassie.

Other participants in the round included Audere Capital and TRCM.

Prominent figures in life sciences include Jeff Marrazzo, co-founder and former CEO of Spark Therapeutics, which was recently acquired by Roche for nearly $5 billion.

How it works: The company has two products, BioPhyRx and BiologicAI.

The former is a generative AI solution designed to create a centralized area to access scientific and regulatory resources.

The latter is a predictive AI engine that aids life science companies through the drug development process and benchmarks preclinical assets against those in development or already approved by the FDA.

In live testing during the last 27 months, the validated technology predicted the outcomes of over 1,500 clinical trials with 80% accuracy, according to Latshaw.

The company is in pilot and has commercial agreements with several leading pharmaceutical companies.

What's next: "We will be fundraising our Series A in the next six months to a year," Latshaw says.

"We are working with two of the top 5 top pharmaceutical companies for pilots for our technology, and will continue to bolster relationships and leverage large opportunities."

What they're saying: "If there's anything we learned from the past few years ... it is that the need to bring drugs to market — quickly and effectively — has never been greater," says Metrodora's Kassie.

"In fact, research shows that just a 10% improvement in the success rates of clinical trials from AI is predicted to lead to an additional 250 novel therapies over the next 10 years."

1 big thing: BioPhy bags $4.5M pre-seed

Animated gif of a syringe with glowing cycling binary code

Perinatal supplement startup Needed raised $14 million to study pregnant people's nutritional needs, co-CEOs Julie Sawaya and Ryan Woodbury tell Erin exclusively.

Why it's the BFD: The supplement industry is poorly regulated and very little research has been done on the nutritional needs surrounding pregnancy.

How it works: Los Angeles-based Needed sells supplements it says support egg and sperm quality, lactation, stress, sleep, and hydration.

"We have a team of practitioners combing through the research and aggregating insights from their practices and that of their peers to find out what's supportive and safe," says Woodbury.

Sawaya and Woodbury are certified nutritionists, they tell Axios.

Zoom in: Via its research arm, Needed Labs, Woodbury and Sawaya will also publish the company's first white paper this week. The pair hopes to eventually publish more research in "top tier nutritional or obstetrics journals," Woodbury says.

Needed Labs is "really a tool to collect data in a more friendly way so larger decision-making bodies need to start paying attention," says Woodbury.

What they're saying: "There's been a significant underfunding of women's health, both on the research and business side," says Craftory partner and Needed investor Jamie Swango, adding that Needed is the firm's first investment in the women's health sector.

Details: The Craftory led the unlabeled round.

Existing backers Seae Ventures and Crescent Ridge Partners joined.

Funds will birth new products and content and power the company's new research arm, Needed Labs.

The intrigue: Sawaya and Woodbury say they intentionally didn't label the round a Series A because they hope it is the last time they fundraise

"We're describing it as a growth round because we expect this to be the last round we raise prior to an eventual exit," Sawaya says.

State of play: Several other fertility-minded nutrition companies have been targets of recent venture-backed company acquisitions, but Sawaya and Woodbury say some rivals treat supplements "more as an afterthought" than a core product.

Home testing company Everly Health in 2021 acquired fertility testing and nutrition startup Natalist.

Telehealth company Ro in 2021 acquired testing and supplement startup Modern Fertility for a reported $225 million.

2. The BFD: Needed births $14M for perinatal support

Illustration of four toy blocks with symbols of a check mark, a pregnant person, a heart, and a baby.

Want more health tech deals? Check out the Axios Pro Deals Tracker beta.

• AdaptX, a Seattle-based developer of clinical management software, raised $10m in an unlabeled round led by Cercano Management with participation from Memorial Hermann Health System and Morningside Ventures, as well as insiders Founders' Co-op, Fortson VC, Star Equity and WRF Capital. https://axios.link/49lHMkr 

• Neteera, a Jerusalem-based patient monitoring startup, raised $6.7m in Series B extension funding led by Aescuvest with participation from Foxconn Technology Co. https://axios.link/3u4PAXC 

• Kento Health, a Montreal-based cardiac rehabilitation and health technology startup, raised $3m in pre-seed funding led by Both Boreal Ventures and N49P with participation from Broom Ventures and Graphite Ventures. https://axios.link/3G7Uh5X 

• Likeminded, a Berlin-based provider of B2B telemental health tools, raised €1.5m in seed extension funding from IBB Ventures and N&V Capital. https://axios.link/3tVNAAP 

• PreventScripts, a Paducah, Kentucky-based provider of behavioral interventions for diabetes and hypertension, raised $1.5m in seed funding led by Keyhorse Capital and iSelect Fund. http://www.preventscripts.com

• Arlington Capital Partners-backed Everest Clinical Research, a Toronto-based full-service contract research organization, acquired August Research, a Sofia, Bulgaria-based CRO managing Phase I-IV clinical trials across Europe. https://arlingtoncap.com/

• Harvest Partners, a New York-based PE firm, raised $5.34b for its ninth fund. www.harvestpartners.com

• Abcam (Nasdaq: ABCM) shareholders approved a $5.7b all-cash takeover offer from Danaher (NYSE: DHR). https://axios.link/3tZjjkB

• Cigna Group (NYSE: CI) is considering a sale of its Medicare Advantage business, per Reuters. https://axios.link/46W0u0m

3. Deals o' the day

• Scott Healy, formerly general manager of health care ventures at Ascend Learning, joined Psych Hub as CEO. https://axios.link/47mOhl0 

• Rory Cusack Weier, formerly group product manager at Nuna, joined AndHealth as communications director. https://andhealth.com/ 

• Jinlian Wu joined Basys.ai as chief of staff. https://www.basys.ai/ 

• Jeffrey Berkowitz, CEO of Real Endpoints, joined Permira as senior adviser to the global health care team. https://www.permira.com/

• Andrew Walker left a post as director at West Monroe Partners to become EVP of operations at Emtelligent. https://emtelligent.com/

• Ellen Herlacher was promoted from principal to partner at LRVHealth. www.lrvhealth.com

4. It's Personnel

💸 California's health care wage law has a steep price tag — Axios

🌬️ Philips executive approved defective breathing machines despite risks — ProPublica

5. Your daily dose

Illustration of a hand holding an eyedropper that has spelled out "daily dose" in liquid.

🌲 Erin took the pup for a 10-mile hike — possibly the last of the season — featuring gorgeous views of Donner Lake.

💟 Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Mickey Meece. Please ask your colleagues, friends, and family to sign up.

November 07, 2023

1 big thing: BioPhy bags $4.5M pre-seed