| DEALFLOWUPDATE Issue #32. Friday, May 17 |
Hello Everyone, For this week’s edition of the newsletter, we’ll continue to discuss interesting deals in fields that we are tracking, as well as trends in the industry that are potentially beneficial to our current and future portfolio. This includes topics in diagnostic companies, regulatory approval, and the microbiome. -Neal If this is your first issue, please subscribe and consider sharing with others. Additionally, we welcome news from our readers, if you’re up to something interesting, let us know. Email chad@zoiccapital.com |
 Dealflow Detecting Disease, Cancer and the Common Cold The bacteria in our gut are already the center of a great deal of attention. Finding out what species is present, along with how they affect diseases and the effectiveness of treatments is the theme of multiple startups, acquisitions, and drug development programs. This field will only get more and more investment and attention, as more is being uncovered about how these bacteria and the microbiome play a role in almost every aspect of our health. This is for not just immediately apparent cases such as inflammatory bowel diseases and colon cancer, but even cases such as the common cold. Although there are multiple companies trying to come up with a definitive model for diagnosing conditions based on sequencing the microbiome, none have come up with a dominant model or market position yet. A prototype wearable device is a very interesting take on cancer diagnostics. It uses antibody binding surfaces to detect circulating tumor cells in the wearer’s bloodstream, allowing real-time detection in a wearable device. This is especially unique in that it bridges the gap between high acuity diagnosis like cancer and consumer use usually seen in the diagnostics we feature. In this case, this system would be useful in patients that are at risk and, like the technologies we have featured before, allow for more continuous monitoring for the physician while the patient is at home. The continuing increase in artificial intelligence technologies and companies with medical applications is causing the FDA to rethink some of its regulatory approvals. Much like the breakthrough process described later, the agency does adapt to balance the need for regulation while still assisting in meeting unmet needs. The issue with AI tools is that they evolve and change as more data is collected. Normally, the FDA wants to approve a system that is the same when it is on the market, typically seen in a “design freeze” before a device is submitted for approval. For our metrics, we continuously see value in artificial intelligence, but only when it can be part of a system that can be protected by strong IP. This can occur when a unique hardware IP component is present, or IP can be filed for the data networks and actions that an AI system can recommend. We have discussed the ways in which the FDA is trying to help speed up approval of innovative devices. This helps our thesis a great deal, as we specifically look for the combination of major improvements on current technology, while still being a short regulatory pathway. In addition to the de novo pathway we have mentioned in a previous issue, there is also the breakthrough designation. This designation, previously known as the Expedited Access Pathway, provides for not only an accelerated timeline but priority review by the FDA. This pathway is seen in several recent innovations and specifically looks for technologies that have no current equivalent, which, coincidentally, is one of our key investment metrics. As an example of both breakthrough devices and diagnostics, a spin-out of major diagnostic company Illumina has received that designation for its blood cancer test. This is also an example of the major impact that sequencing continue to serve for early detection of major diseases. The cost of sequencing continues to go down, with the potential of reaching a cost of $1 per sample soon. This will make the data processing and, as mentioned previously, the actions that should be taken as a result of the analysis, even more important as the analysis itself becomes closer to a commodity. Spotlight #ZoicNews   Event News Zoic Capital recently visited the University of Florida’s, Center for Advanced Medical Learning and Simulation (CAMLS). Being one of the world’s largest, free-standing simulation facilities, CAMLS is exclusively dedicated to training healthcare professionals for improved clinical skills and patient care, and one of the few places amongst many where Zoic sources its deal flow. We review over 1000 investment opportunities each year and of those, we invest in only the most promising handful by diligently tracking the deal sources in the industry that are potentially beneficial to our current and future portfolio. Optina Diagnostics Congratulations to one of our portfolio companies, Optina Dx, in their recent announcement of a Breakthrough Device Designation from the U.S. FDA. Optina received the designation for their retinal imaging platform to aid in the diagnosis of Alzheimer’s disease. David Lapointe, CEO of Optina Diagnostics states, “We are excited to receive this Breakthrough Device Designation from the FDA as it recognizes the potential benefits the Optina Diagnostics’ platform could bring to clinicians, their patients and families in the diagnosis of Alzheimer’s disease and will permit to expedite its development and regulatory approval in the U.S.” Optina Diagnostics’ technology based on data-rich hyperspectral retinal imaging combined with AI opens tremendous possibilities to have insights into the brain non-invasively and at a low cost. The Optina Diagnostics technology could also be helpful to accelerate and reduce the cost for the enrollment of participants that are really on the Alzheimer’s path to conduct clinical trials for disease-modifying drugs for Alzheimer’s disease. Press Release Podcast# Market Meditations Podcast  “We have biases that we bring with us to investing, and while they serve valuable purposes they prevent us from seeing things as they should be, and understanding that distinction is critical in being a good investor.” – Roger Kumar Joining the podcast this week is Roger Kumar, who shares his background having grown up learning the competitive spirit of horse racing on his Father’s Kentucky horse track. Roger discusses how these experiences shaped his thinking and perspective on investment behavior and risk management later in his career working for a hedge fund and later moving into asset management and institutional client advising with one billion in assets under management. Episode 20, “The Front Runner” is available on iTunes, Google Play Music, or Soundcloud. What We’re Reading THE WALL STREET JOURNAL CEOs in Health Care Discuss Challenges of Working With Artificial Intelligence STAT Connecting With Patients Can Keep Physicians From Becoming ‘Uncomfortably Numb’ SMITHSONIAN Scientists Create E. Coli Bacteria With Completely Synthetic Genome FORBES It’s Good To Talk: Raising Awareness Of Mental Health In Franchising Connect With Zoic Capital |
| The Biweekly Dealflow Update, curated by the team at Zoic Capital. |
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