CITY Healthcare Report 2019 INTRODUCTION

Welcome to the second annual Healthcare Venture Capital Report. For 2019, we have expanded the scope of our report by including insights and expertise from 15 of NYC’s leading investors and entrepreneurs, and for the first time, have added a ranking of the top 25 funded health companies and highlighted NYC’s leading healthcare investors to know.

Thanks to all who contributed to this report, and a Healthcare is vital to NYC’s economy in many ways special acknowledgement to our partners at Cooley, including as a major employer. Of the largest NYC who helped gather all of the data for this report, as employers listed in Crain’s New York 2018 list, 30% well as our quarterly updates throughout the year. come from our health systems (Northwell, NYC Health and Hospitals, Mount Sinai, Montefiore, NYU Langone 2018 was a remarkable year for healthcare investing in and NewYork-Presbyterian) representing 217,000 jobs. the reaching an all-time high of $30+ billion across multiple sectors (PitchBook-NVCA Venture As Ellie Wheeler, partner at Greycroft, points out: “There is Monitor, December 2018). New York was no different and a vibrant and ever-expanding ecosystem here in New York experienced impressive growth – we saw $1.85 billion City, including access to pharmaceutical companies and invested across 83 healthcare companies. Like the rest big insurers, not to mention a significant percentage of of the industry, we saw larger rounds at all stages. Fortune 500 companies and other big employers that all have increasing incentives to get involved in healthcare. Importantly, we saw several critical exits. Roche’s With major universities here as well, there is a significant acquisition of Flatiron Health for $2.1 billion last February amount of talent and it is only getting better.” was a watershed moment for NYC health start-ups. Ezra Mehlman, Managing Partner of Health Enterprise The New York healthcare market continues to flourish. Partners, commented: “We may just be hitting the apex We’re excited to see what the coming year has in store moment of healthcare venture capital investing: with for NYC. fundraising levels and valuations at all-time highs, the only viable exit for many companies is an IPO or In good health, multi-billion dollar acquisitions.”

While Flatiron garnered the lion’s share of attention, NYC had other important exits. Syntimmune, founded in 2013 by Dr. Laurence Blumberg, a serial biopharma entrepreneur, Bunny Ellerin and his brother Dr. Richard Blumberg, was acquired by President Alexion for $400 million. WebMD (which was acquired by New York City Health Business Leaders NYC-based IAC) also added two local healthcare properties to its platform – Vitals and Jobson Healthcare.

2 2018 BY THE NUMBERS

HEALTH COMPANIES IN FUNDING 83 RECEIVED $1.85B IN 2018

3% OTHER ($58M) 31% HEALTH 10% ($574M) DATA ANALYTICS ($177M) FUNDING BY 26% % SECTOR BIOPHARMA 13 ($488M) PATIENT ENGAGEMENT ($232M)

17% CONSUMER HEALTH ($320M)

7% SEED/ANGEL ($129M) 27% SERIES A FUNDING BY ($508.5M) 16% VENTURE BOUND ROUND ($289M) 27% 23% LATE STAGE* SERIES B ($503.5M) ($419M)

* Series C/D/Corporate 3 TOP 25 FUNDED NYC

$ Raised # Company Description Sector (MM) Key Investors

Health insurance company employing Health Alphabet, Founders Fund, 1 technology, design, and data to $540 Insurance CapitalG, Verily humanize healthcare.

Direct-to-consumer healthcare FirstMark Capital, SignalFire, company handling everything from Consumer 2 $88 Initialized Capital, General online diagnosis to convenient Health Catalyst delivery of medication.

Lux Capital, The Column Group, Biotechnology company developing a Polaris Partners, Euclidean 3 BioPharma $87 platform to harness the gut-brain axis. Capital, Two Sigma Ventures, Alexandria Ventures, Bill Gates

Biotechnology company developing disease-modifying gene therapies 4 BioPharma $75 Orbimed for Parkinson’s disease and other neurodegenerative disorders.

Biotechnology company developing Versant Ventures, Forbion, S.R. 5 a novel drug class targeting BioPharma $54 One, Alexandria Ventures RNA-modifying proteins.

Technology company rebuilding the pharmacy industry that enables Consumer Thrive Capital, Brook Capital 6 $50 customized outcomes for doctors, Health Partners hospitals, insurers, and manufacturers.

Biotechnology company commercializing pharmaceuticals 6 BioPharma $50 C-Bridge Capital for patients in Emerging Markets including Asia Pacific.

Biotechnology company pursuing Versant Ventures, Polaris 8 next-generation immuno-oncology BioPharma $48 Partners, LS Polaris Innovation research and drug development. Fund

Medical technology company applying 9 artificial intelligence to improve clinical Data Analytics $40 GV, DFJ, Zach Weinberg diagnostics.

Real-world data and analytics company using proprietary IQVIA, EW Healthcare Partners, 9 Data Analytics $40 methodology to enable precision Memorial Sloan Kettering medicine at scale.

Healthcare technology company F-Prime, Polaris Partners, Oak Patient 9 improving behavioral health delivery $40 HC/FT, GV, Deerfield Engagement for patients, providers, and payers. Management

Novo Holdings A/S, Sofinnova Discovery platform revolutionizing Partners, Lepu Medical, 9 cancer treatment through first-in-class BioPharma $40 Alexandria Ventures, therapeutics. Partnership Fund NYC

4 HEALTH COMPANIES IN 2018

$ Raised # Company Description Sector (MM) Key Investors

AI-powered health application for Consumer 14W, Comcast Ventures, 13 consumer health education and $37.5 Health Mangrove Capital Partners linkage to primary care.

Healthcare technology company that New Enterprise Associates, Flare delivers real-world evidence for life 14 Data Analytics $36.4 Capital Partners, Lakestar, Town sciences companies, payers, and Hall Ventures providers.

Patient payment and engagement Kinnevik, Founders Fund, Thrive Patient 15 platform for hospitals, health systems $36 Capital, Lakestar, Sound Engagement and medical groups. Ventures

New type of health plan aligning Bain Capital Ventures, F-Prime, employers, employees, and Health 16 $34 Maverick Ventures, Bessemer, providers to ahieve cost-effective, Insurance Ingleside Investor high-quality care.

Biotechnology company treating Abbvie Ventures, Alexandria neurodegeneration and neuronal 17 BioPharma $31 Ventures , ARCH, injuries through development of Ventures novel therapeutics.

Goldman Sachs Investment Subscription-based personalized Consumer Partners, Goodwater Capital, 18 $29 vitamin packs. Health Juxtapose, RRE Ventures, Tusk Ventures

Sequoia, Oak HC/FT, Spring Virtual clinic dedicated to women’s Consumer 19 $27 Mountain Capital, 14W, Female and family health. Health Founders Fund

Healthcare technology company transforming cancer diagnosis, 20 Data Analytics $25 Breyer Capital treatment and prevention through cutting-edge AI.

Episode-based digital care delivery Patient 21 $21 Insight Venture Partners and remote patient monitoring. Engagement

Designing personalized health system Maverick Ventures, Thrive for qualifying Medicaid and Medicare Patient 22 $20.8 Capital, , Oxeon, beneficiaries living in underserved city Engagement Town Hall Ventures neighborhoods.

Behavioral healthcare company in Behavioral 23 $20 F-Prime Capital Partners psychiatric hospital space. Health

Diabetes management platform Patient 24 that harnesses the power of mobile $17.4 Innova Capital Partners, FJ Labs Engagement computing and data science.

Healthcare technology company developing and commercializing Digital 25 $17 Ventures software as prescription medical Therapeutics treatments. & WITH NYC’S TOP QAMOVERS & SHAKERS

Todd Pietri | Managing Partner, Aran Ron | Partner, FundRx Activate Venture Partners The city has developed an ecosystem of individuals New York has robust technology and healthcare who are really interested in early-stage companies. sectors. What makes New York different is that you As a result, New York is attracting a lot of young, have the life sciences and pharmaceutical corridor, high-energy, smart people with great ideas who which is a big plus and difficult to replicate. There want to start early-stage companies. New York City are multiple generations of good companies that has become the ideal environment and may even have grown up here. be better than, or at least rival, Silicon Valley.

Ellie Wheeler Q: What are the benefits of Partner, Greycroft Our firm is in both New being an investor in NYC? York and Los Angeles, and to date, our healthcare investing has been led out of the New York office. It is not just out of interest of our investing partners, but Drew Schiff | Managing Partner, Aisling Capital because New York is For life science ventures, NYC provides access to and consultation with not where we are seeing the only an expert but potentially many experts that are only a subway ride away. companies located and From NewYork–Presbyterian, Rockefeller and Memorial Sloan Kettering up where we are seeing the to Montefiore/Einstein back through Columbia and Mt. Sinai and then down most opportunity. to NYU and out to Brooklyn, there are clinicians and researchers that can provide relevant and important perspective and advice.

Ezra Mehlman | General Partner, Health Enterprise Partners NYC has many of the essential building blocks for a vibrant healthcare venture system. The presence of: several large health systems with well-resourced investment and innovation programs; a deep pool of intellectual talent emerging from graduate schools; an accumulation of NYC-based “alumni” from large tech companies who possess dedicated healthcare interests; the proliferation of venture accelerators; and of course a general abundance of financial capital have created a unique healthcare entrepreneurial environment in New York.

6 Florian Otto | CEO, Cedar New York is a hot bed for - there’s an incredible energy here that I’ve grown to love. The city has so many resources that, when utilized correctly, can really help put you on a path towards success. We Carolyn Magill believe that the engineering talent in NYC is on par with (or perhaps even CEO, Aetion beginning to surpass) Silicon Valley. New York City has been an ideal location for us due to the volume of expertise within the region, across all sectors of healthcare. Not only is the talent pool diverse and full of people who are passionate about Q: What are the improving healthcare, we’re close to many of Zachariah Reitano benefits of being our current (and potential) Co-founder and CEO, Ro partners—from biopharma From hospitals to medical an entrepreneur to payers and providers, schools to pharmaceutical which enables us to build companies, New York City is collaborative relationships home to many of the most in NYC? between them. renowned healthcare institutions in the world. This has enabled Ro to benefit from the unparalleled wealth of knowledge of international thought leaders and to Jean Drouin | CEO, Clarify Health garner the enthusiastic New York’s strength in a broad range of tech fields—from health support of medical experts and advertising and finance to digital media and ecommerce— in every field through each makes it an ideal place for Clarify to plant roots and grow. We’re phase of our growth. thrilled to be part of the constantly evolving New York City tech scene, where we can easily network and exchange learnings with other companies in the community.

Wendy Goldstein and Yvan-Claude Pierre | Partners, Cooley Being home to large pharma companies and many life sciences companies makes it a very active, robust and also mature ecosystem, as well as burgeoning market for innovative technologies. In addition, given NYC’s proximity to New Jersey which ranks second in cancer treatment drugs in development, the NYC/New Jersey corridor is the leading differentiated region in the healthcare/life sciences industry.

7 NYC TOP HEALTHCARE

HEALTHCARE SPECIFIC INVESTORS

Investor Sector Notable NYC Investments

Intercept Pharmaceuticals, Synergy Aisling Capital Pharmaceuticals, Loxo Oncology, Bioenvision

Apple Tree Partners Syntimmune

Casdin Capital Flatiron Health, Clover Health

Cureatr, Quartet, Sermo, Schrodinger, Deerfield Management Intra-Cellular Therapies

Digitalis CareDox, Somatix

FundRx Annum Health, EpiBone, Epicured, Wellth

Health Catalyst Capital Risalto Health Management

Health Enterprise Partners Vitals

LifeSci Venture Partners Attune Pharmaceuticals, Rocket Pharma

AiCure, Truveris, NY Digital Health Accelerator, New Leaf Venture Partners Intercept Pharmaceuticals

NewYork-Presbyterian WorkFusion Ventures

NGN Capital Exosome Diagnostics, Vivaldi Biosciences

Prevail Therapeutics, Intercept Pharmaceuticals, OrbiMed Adicet Bio, Loxo Oncology, SmartZyme BioPharma

Aetion, Centivo, Pager, Quartet, Risalto Health, Oxeon Partners RubiconMD

Magnolia Neurosciences, Petra Pharma, Pfizer Venture Investments Accelerator Corporation, Lodo Therapeutics

RTW Investments Roivant Sciences, Rocket Pharma

StartUp Health CareDox, Cohero Health, Doctor.com, Zeel

Windham Venture Partners Cureatr, Credsimple, Novocure, Blueprint Health

INVESTORS TO KNOW

GENERAL INVESTORS

Investor Sector Notable NYC Investments

Activate Venture Partners Cureatr, Healthify, Medidata, Vitals

Alma, K Health, Ro, Oscar Health, BoxGroup FlatIron Health

Collaborative Fund Zipdrug, Sherpaa

BioDigital, Parsley Health, Phosphorous FirstMark Capital Diagnostics, Ro

Cylera, Call9, Maven Health, Flatiron Great Oaks Venture Capital Health

Eden Health, Health Reveal, Thrive Greycroft Global

K Health, Maxwell Health, Oscar, Thrive Lerer Hippeau Ventures Global, Talkspace

Kallyope, Zipdrug, Hometeam, Pager, Lux Capital SOLS

Cureatr, Petra Pharma, Spring Health, Partnership for New York City Wellth

RRE Ventures Care/Of, Nomad Health, Spring Health

Capsule, Cedar Health, Cityblock Thrive Capital Health, Oscar Health

SECTOR LEGEND

BioPharma Health Technology Health Services

Medical Devices & Diagnostics & Tools Supplies

9 How has Gil Addo Q: CEO, RubiconMD the NYC venture The tech ecosystem in NYC has been community incredibly supportive Michael Aberman | CEO, of us. The community Quentis Therapeutics has put tremendous supported resources behind The NYC venture community has been health tech very supportive. NY State participated in your growth? innovation. That is our Series A, NYC provided investment to why we moved from fund our NYC headquarters and Boston to NYC to Versant’s NY investment arm – Highline start this business. Therapeutics – funded our Series A. Plus Over the last 5+ our technology is licensed from Cornell! years, we’ve seen the community as both incredibly collaborative and Bronwyn Spira | CEO, Force Therapeutics helpful in supporting and promoting us. StartUp Health has been helpful in creating a community of Healthcare thought leaders. The academic community has supported recruiting efforts, especially places like Columbia’s MPH program, Flatiron School and General Assembly.

Joel Wishkovsky | CEO, Simple Contacts New York State has kept an open dialogue with us. They have been very pro-innovation. Through our relationships with the academic community, we get to work with leading Drew Schiff experts in the medical field and see the latest tech coming out of the universities. Managing Partner, Aisling Capital Recruiting early-stage researchers, drug developers and life science innovators to a city with high operating costs and a high cost of living Ezra Mehlman Q: What are some is almost always a General Partner, Health consideration that Enterprise Partners of the challenges of needs to be thought Despite making major through not only at strides towards providing building a business the initial stages but subsidized office space as a company gains and resources for startups in NYC? traction and grows of in the city, NYC remains a several employees to very expensive place to live dozens or hundreds and work. of employees.

10 Aran Ron | Partner, FundRx Florian Otto There are enormous inefficiencies in the CEO, Cedar healthcare system, and we’ve only scratched the There is no denying that there is a surface of addressing those inefficiencies. I’m consumerization trend taking over healthcare. optimistic about companies that can provide Health insurance is an area that can be much better services or IT solutions that can capture more patient friendly. Understanding patient data in a different way. benefits should be easier and insurers could be a more active partner in how patients consume healthcare.

Q: Which healthcare sectors Bronwyn Spira | CEO, Force Therapeutics are you excited about? Patient engagement and patient enablement platforms will be key to managing costs and enhancing the patient experience in healthcare.

Wendy Goldstein | Yvan-Claude Pierre Partners, Cooley We are most excited about gene therapy and gene editing as healthcare subsectors grow in the next 5 years and beyond. The possibilities of gene therapy and gene editing hold much promise Ellie Wheeler and with careful planning and regulation, gene therapy and gene Partner, Greycroft editing will become an important remedy of the near future. We’re excited about anything that is bringing transparency to healthcare. We’re also excited about analytics that are driving better Todd Pietri | Managing Partner, Activate Venture Partners outcomes and cost efficiencies, and the We’re interested in Health Economics & Outcomes Research (HEOR). startups addressing the We’re also interested in end of life or palliative care and innovation around changing landscape of primary care business models that will have less brick and mortar, and more care, including on-site, telemedicine and virtual care. near-site, and telemedicine. It will be important to approach it with a consumer lens.

11 WHAT TO WATCH FOR IN 2019 2019 is shaping up to be a pivotal year for New York healthcare. We predict the following trends in the year ahead:

1. 2. 3.

DTC Health will Biotech will hit its stride. Healthcare delivery continue to flourish. When will NYC catch up to Boston will surprise you. Direct-to-consumer services like and SF? We’re starting to see First came One Medical. Then Ro, Capsule, Simple Contacts and traction. In 2018, $488 million went CityMD. And we realized that the Parachute Health are booming. to local biotech startups like days of the sterile physician office, They offer so much of what Kallyope, Prevail Therapeutics, long wait times, and inability to traditional healthcare doesn’t – Gotham Therapeutics, Quentis connect by anything but phone personalization, ease of use, Therapeutics and Rgenix. Lab were numbered. Now we have seamless customer experience space, once a huge gap, is coming telehealth, in-home visits, concierge and privacy when it matters. online with the expansion of the service - all tech-enabled. Think They also connect directly with West Side’s Hudson Research Maven, Eden Health, Parsley providers and health plans to Center (home to NY Stem Cell Health, Alma, and Heartbeat alleviate customer stress. Foundation) and Alexandria’s Health. No doubt we’ll see more Expect the trend continue. planned third tower on the East models emerge in 2019. Side. JLABS @ NYC opened in June inside the New York Genome Center and ELabNYC announced its 7th cohort in December. The life science vision is finally taking shape.

12 4. 5. 6.

Patient engagement Data that informs will New models will disrupt will simplify and transform the market. the PBM industry. improve care. The holy grail is actionable data Will 2019 be the year that PBMs that drives better decision-making, are disrupted? We think so. Lack Navigating healthcare can be hard. changes behavior, leads to better of transparency and misaligned Tools that help patients simplify outcomes. As payment models incentives may be coming to an the complexities of access, shift from volume to value and end. We’ve had discussions with adherence, benefits and payments clinical decisions become more multiple startups looking to break help them take back some control. complex, key stakeholders need the PBM hold on pricing and NYC is home to companies in all advanced analytics to help them distribution. We expect to see categories - Cedar, Force thrive. Medidata was one of the one or more funded in 2019. Therapeutics, AbleTo, Cecilia first to recognize this, followed by Health and Wellthie to name a Crossix, Prognos, Flatiron and few. These services address real others. Today startups like Aetion, gaps for patients and families Cota and Clarify Health are leading which will lead employers and the way to better outcomes. plans to cover them, driving growth in this category. Paige Watson HELLO my name is... Since Oscar launched in NYC in late health strategy and analytics at It supports the 2012, we’ve noticed a growing trend. RedPeak, to weigh in. “The most It showed up several times during successful health tech companies idea that some 2018 with the launch of Eden have recognized that they need to technologies“ should Health, Paige.AI, Alma and Ezra.AI. appeal to the human in all of us. It was cemented during JP Morgan Using a name like Watson or Paige be considered a when Fit4D announced its name is one way to humanize technology. partner or ally change to Cecilia Health. What’s the It supports the idea that some deal with first names as company technologies should be considered to care teams names? We asked branding expert a partner or ally to care teams going forward.” John Breen, executive director of going forward.”

13 Carolyn Magill | CEO, Aetion Always keep in mind the mission of healthcare and how your product or service improves the experience of delivering and receiving care. Most importantly, make sure you are building a business you’re truly Michael Aberman passionate about, and stay focused on solving real unmet needs. CEO, Quentis Therapeutics Some of the challenges associated with NYC are diminishing. We used to Zachariah Reitano | Co-founder and CEO, Ro be a smaller biotech community than other Don’t be intimidated by regulation. Healthcare is complex “hubs” but this is changing and this complexity isn’t going anywhere any time soon. rapidly. On the real estate However, this is an opportunity for startups. Own the front, there was not much complexity for patients. Make their lives more simple by developed lab space. This making your life more difficult. has improved greatly and may not be as much of an issue now.

MOVERS & SHAKERS FINAL THOUGHTS

Jean Drouin | CEO, Clarify Health We continue to be humbled by the depth of talent in Gil Addo the city and inspired by the creativity, vitality and special CEO, RubiconMD capacity of New Yorkers to get things done. The capital, customers and collaborators you need to grow are all in and around NYC. Hop on the subway or train Joel Wishkovsky | CEO, Simple Contacts and go to them. Stay focused. Don’t get distracted by all the opportunities around you. Focus instead on what you are here to build.

14 METHODOLOGY AUTHORS Data used in the creation of this report was obtained from PitchBook and covered the period from 01/01/2018 to 12/31/2018. PitchBook places companies into various healthcare subsectors, which we reviewed and used in our analysis. These include: Zack Caplan is an MBA • Healthcare Devices and Supplies Bunny Ellerin is president student at Columbia • Healthcare Services and co-founder of NYC Business School. Zack’s Health Business Leaders. professional experience • Healthcare Technology Systems She is also Director of includes healthcare • Pharmaceuticals and Biotechnology the Healthcare and technology startup Stellar • Other Healthcare Pharmaceutical Management Health, Boston Children’s Program at Columbia Hospital’s Innovation and Company Analysis: Business School. Bunny Digital Health Accelerator, We included a company on the list if (1) is passionate about driving and Deloitte Consulting’s the company was classified in a healthcare change and transforming healthcare strategy and category above in the PitchBook database; healthcare. operations practice. (2) the company listed NYC as its corporate headquarters; (3) the company received seed, angel, early-stage or late-stage funding during the period 01/01/2018 to 12/31/2018. Investor Analysis: ACKNOWLEDGEMENTS To compile a list of New York City healthcare venture capitalists, we used the One of the factors that differentiates NYC from other markets PitchBook database to identify investors is the entrepreneurs, investors and advisors who are driving within New York City who had done at least innovation within our health ecosystem. Thank you to our one healthcare deal during the period esteemed contributors for providing insights for this report. 01/01/2018 to 12/31/2018. Only seed, Gil Addo | CEO, RubiconMD angel, early-stage and late-stage were considered. We considered an investor to Michael Aberman, MD | CEO, Quentis Therapeutics be in New York City if the fund listed New Jean Drouin, MD | CEO, Clarify Health York City as its headquarters OR if the Wendy Goldstein, Esq. | Partner, Cooley fund had a dedicated office in New York City. The analysis is centered on VC-focused Carolyn Magill | CEO, Aetion investors, however investors Ezra Mehlman | General Partner, Health Enterprise Partners with VC deals in the healthcare sector also Florian Otto, MD | CEO, Cedar were considered. Yvan-Claude Pierre, Esq. | Partner, Cooley Disclaimer This report is provided for informational Todd Pietri | Managing Partner, Activate Venture Partners purposes only. Where possible, we verified Zachariah Reitano | Co-founder and CEO, Ro information obtained from PitchBook Aran Ron, MD | Partner, FundRx through publicly-available sources (e.g. company press releases, news reports) Drew Schiff, MD | Managing Partner, Aisling Capital and made judgment calls based on that. Bronwyn Spira, PT | CEO, Force Therapeutics If you find an error in the report, please Ellie Wheeler | Partner, Greycroft contact us at [email protected] so that we can correct it. Joel Wishkovsky | CEO, Simple Contacts 15 NYC Health Business Leaders is a professional community of 3,000 senior executives who are leading, innovating and driving healthcare forward. For more information visit www.nychbl.com or follow us @nychbl.

Thank you to the Cooley team for their support and partnership!

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