The convergence of life science innovation and healthcare delivery was the theme on the first day of a two-day benchmarking visit to San Diego by a delegation from Life Science Tennessee and the Nashville Health Care Council.
More than two dozen Tennesseans, including the author, made the trip last Thursday and Friday to better understand the tremendous growth that has occurred in one of the nation’s hot spots for these two sectors.
During a succession of presentations on Thursday afternoon, the delegation was exposed to the strategies that a number of San Diego entities are pursuing to capitalize on the convergence of life sciences and healthcare. Recurring themes focused on data analytics, risk management, partnerships, predictive modeling, cost reduction, and improved outcomes.
Tennesseans played roles in both afternoon sessions. One panel was moderated by Lance Bridgesmith, Member of presenting sponsor Butler, Snow, O’Mara, Stevens & Cannada. Two other Tennesseans – Dennis Grimaud, Chairman and Chief Executive Officer (CEO) of Diatherix Laboratories in Huntsville, and Ed Jones, CEO and President of Nashville-based HealthTrust Purchasing Group – served on panels.
Grimaud, who still lives in the state, is a past president of the Tennessee Biotechnology Association, the previous name for Life Science Tennessee. He said that “everything we do is outcomes-driven and performance-based,” no doubt contributing to the 100 percent growth that Diatherix has produced each of the past two years.
Jones emphasized one of the recurring themes about the importance of partnering in the future, saying alliances will helping manage risks, since “there will be a lot more scrutiny of where bets are going to be placed.”
Because teknovation.biz has a focus on start-ups and venture capital, we were particularly interested in the comments of Chris Woolley, Founder and Executive Vice President of Square 1 Bank. He oversees the firm’s national banking practice in life sciences and its overall technology investments in the western states. Square 1’s closest location to Tennessee is in Durham, NC.
“We’ve had a choppy economy for the last four years, and the future is very similar,” Woolley said. “The hurdle to get capital is higher . . . but money for great ideas is still there.”
He explained that Square 1 Bank, which has $2 billion in assets, works in collaboration with venture funds to “put senior debt into innovative companies,” frequently in the Series A round. He and his colleagues have worked with about 350 venture funds, investing anywhere from $1 million to $15 million.
“We do the financial due diligence,” Woolley said, adding that “the VCs do the scientific analysis.”
From his perspective, the era is over where a bio-pharma start-up can take a new drug all the way to market. “They will take it to a certain level, then either partner with another company or sell,” Woolley explained.
Like many of the panelists, he said healthcare information technology is one of the hot spots in the future, but medical devices and biotechnology “will be challenged.”
Rick LeMoine, Chief Medical Information Officer of Sharp Healthcare in San Diego, emphasized the growing importance of “real healthcare delivery analytics” which he described as in its infancy. “It’s really important to us, and we are looking for good partners,” he explained. “One-third of our business is managed care, and we understand the risk that most don’t.”
Other speakers on the first day included:
Terrence Gregg, President and CEO of DexCom, a company growing by 35 to 40 percent annually, that is focused on diabetes which Gregg said consumes one out of every $10 spent on healthcare.
Richard Neale, Corporate Vice President for Research Operations at Scripps Health, who discussed how Scripps is focused on improving quality and outcomes while also reducing cost and waste.
Joe Panetta, President and CEO of BIOCOM, whose organization represents nearly 600 Southern California companies in bio-pharma, medical devices, lab services and bio-renewables.
Matt Pauls, Senior Vice President for Global Commercial Operations at Shire Regenerative Medicine.
Duane Rother CEO of CONNECT, whose presentation will be summarized in the second article in this series.
Joseph Smith, Chief Medical and Science Officer of West Health, who gave a humorous but insightful dinner speech.
The visit ended with tours of three San Diego companies – Janssen Research and Development, NuVasive, and West Health Institute.
(NEXT: A look at San Diego’s well-respected CONNECT initiative.)