Danforth Quarterly Flash

Danforth Quarterly Flash | August 2018

300 and Counting!

We recently achieved a company milestone with the signing of our 300th client -- an exciting feat given our humble beginnings as a two-man shop back in 2011! Since that time, we've grown the firm to 65+ consultants, entered the markets of digital health and healthcare services, and expanded to new regions including metropolitan New York, Philadelphia and the western US. We're proud to have supported the teams behind some of today's most important innovations in life science and healthcare. Many thanks to our clients, friends and supporters for helping us come this far!

Spotlight on Digital Health

Danforth launched its digital health practice in 2016 to meet the strategic and operational finance needs of companies in this explosive market, which netted $3.4B in venture funding in the first half of 2018 and is on pace for another record-breaking year. Led by Bill Romeo, Managing Director, the team’s skill-sets match the unique requirements of digital health business models and operations, which differ vastly from those in life sciences.

Starting Up. New companies are emerging in a wide range of digital health sub-sectors, from personalized health to digital therapeutics to big data/analytics/RWE solutions. Unlike life science start-ups, the time to market is a sprint and not a marathon. Early-stage teams should understand healthcare but also have experience with go-to-market strategies, SAAS models, reimbursement models, revenue recognition, customer contracts and commercial operations in general – having the right systems and resources in place to support near-term sales and rapid scale up.

Growth Drivers. Digital health continues to grow at a record pace. Its rise can be attributed to the accessibility of new technologies/data and demand for better delivery and lower costs of healthcare. Based on investment activity, there is increasing focus on solutions with clear clinical impact, particularly in the areas of monitoring, treating and diagnosing diseases and in improving workflows for greater efficiency of healthcare practices. The top funded areas in 1H 2018 were:

Data Analytics -- $911 million
Telemedicine -- $701 million
Clinical Decision Support -- $582 million
mHealth Apps -- $535 million
Wearables -- $308 million
Mobile Wireless -- $272 million
Wellness -- $201 million

Overall, it was a very robust first half of 2018 for digital health companies.

Investment Trends. All signs point to a steadily growing market, including more repeat investors and larger deals. The growth in deal size is a result of the steady maturation of a young sector in which digital health companies are increasingly hitting key validation milestones. More and more companies are seeking validation at an earlier stage and investors have increased their expectations, creating a competitive environment based on proven results rather than hype. While early-stage deals accounted for approximately 60% of investment activity in Q1, the number of mid- and later-stage deals is climbing. Artificial intelligence and telehealth remain popular choices for funders to invest in. Among sub-sectors, biometric data acquisition, wellness and personalized health accounted for the larger later-stage rounds, with more focus on provider-centric solutions in early rounds.

How We Can Help. By engaging with Danforth, early and mid-stage companies alike can benefit from flexible vs. dedicated costs and resources, while gaining access to specialized knowledge and talent in the areas of accounting, finance and strategic advisory services. Below is a sample of the digital health companies we serve.

New Clients

We were pleased to welcome 20+ new and returning clients in Q2, including the following companies.

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Q2 Clients in the News

We share your success and congratulate our clients who achieved important milestones at all corporate stages. The following is a sample of news highlights from clients served in Q2.

Financings

Gene Editing Startup Beam Therapeutics Launches with $87M in Series A Funds (see details)
Stealth BioTherapeutics Announces $100M Financings to Advance Clinical Development of Elamipretide and Pipeline (see details)
Nodthera Nets $40M to Take on Chronic Inflammation (see details)
BioCanCell Announces $23 Million PIPE Financing (see details)
Oncologie Kicks off Trans-Pacific Operations with $16.5M in Seed Funding (see details)
X-Biotix Therapeutics, Inc. Secures $7 million in Series A Financing (see details)
Paratek Pharmaceuticals, Inc. Prices $140 Million of Convertible Senior Subordinated Notes due 2024 (see details)

Public Offerings

AVROBIO, Inc. Announces Pricing of Initial Public Offering (see details)
Apellis Pharmaceuticals Announces Proposed Offering of Common Stock (see details)
Verastem Oncology Announces Pricing of Public Offering of Common Stock (see details)

Corporate News

AIT Therapeutics Names Stephen J. DiPalma as Chief Financial Officer (see details)
Orphazyme announces establishment of US subsidiary in Massachusetts (see details)
Eleven Biotherapeutics Announces Corporate Name Change to Sesen Bio (see details)
Aquinnah Pharmaceuticals Receives $3.4M Grant from NINDS to Advance New Therapies for ALS (see details)
Cognition Therapeutics Receives $6.6M in NIA Grants for Two Studies of Elayta^TM (see details)

We're Hiring!

Danforth is always looking for talented finance professionals to join our team of consultants. Please contact Meaghan Chandler for information about flexible, part-time opportunities both within and beyond the Boston area.