Edition 32 — June 15, 2022
Good morning.

A few weeks ago, we discussed the problems and innovation in organ transplantation. This time, we are taking things one step further. Imagine if we could simply print organs instead of waiting for donors. 

This is exactly what researchers around the world are trying to do: working on 3D bioprinting. In this issue, you'll find more background on 3D bioprinting and news about the first bioprinted ear made from a patient's own cells. 

In addition, we have to the following topics for you:
  • Our perspective on Apple’s new health features
  • The first digital therapeutics coming to Roblox
  • Hadi’s reflections on overloaded hospitals 
If you want to learn more about the engineering behind neural implants, check out this longread article on electrodes and neurons. 

Enjoy reading. 

3D-printed ear transplanted to first patient

Illustration by Mary Delaney

What if doctors could simply print organs instead of finding a matching donor and hoping the patient's body doesn't reject the transplants? Surgeons who transplanted a woman with a 3D-printed ear made from her own cells provided an answer to this question.

First patient receives 3D-printed ear

In late May 2022, a research team from the United States successfully transplanted a 3D-printed auricle. The recipient was a 20-year-old woman born with a rare auricular malformation. 

The auricle was manufactured by 3DBio Therapeutics. The company extracted cartilage cells from the patient, propagated them in a special nutrient solution, and then mixed them with a special bio-ink. Afterward, a 3D bioprinter formed a replica of the auricular cartilage—based on a 3D scan of the patient's other healthy ear—within 10 minutes. 

The transplant was part of the first clinical trial to study the safety, benefits, and applicability of the 3D implant. The operation marks the beginning of an approval process that requires at least 11 of these transplants to be performed in California and Texas.

Bioprinting will soon be a reality

The case of the 3D-printed ear follows a handful of other recent groundbreaking advances in transplant technology. 

  • Last fall, surgeons at NYU Langone Health connected the kidney of a genetically-modified pig to the bloodstream of a brain-dead woman for the first time. 
  • Earlier this year, a genetically-modified pig was transplanted into the body of a terminally ill 57-year-old, extending his life by about two months. 
  • In late April, a team led by Boston University announced that they had 3D-printed a tiny replica of a living heart chamber.
If science has its way, 3D-printed tissue could soon replace more than just missing ears, which consist exclusively of cartilage and skin. Work is also being done on organs like the liver, the kidneys, and even 3D-printed lungs or blood vessels

Transplantation economics

These types of bioprinting promise revolutionary applications in all areas of regenerative and restorative medicine, as well as in cosmetic surgery and pharmacological research. 

The reason that science is making so much progress is that there is a significant transplant supply gap. Only healthy transplants help, and even then, there is no guarantee that the recipient organism will accept the transplant without complications. 

Not to be neglected in the innovation calculation are the immense treatment costs that come when no transplant is available: 
  • The costs associated with organ failure are very high. Hemodialysis care costs the Medicare system an average of $90,000 per patient annually in the United States, for a total of $28 billion.
  • The average cost of a kidney transplant in 2020 was $442,500, according to a study published by the American Society of Nephrology. Retail 3D printers, meanwhile, cost anywhere from a few thousand dollars to $100,000, depending on the complexity.
It seems that now is the time to break new ground—not only in terms of impact, but also in terms of economics. This may be a harsh reality, but it’s the truth we’re living in.

The future is within reach

Either way, the future is within reach. Science is making rapid progress.
We are seeing more and more incremental improvements and world firsts in the field of bioprinting. Accordingly, we expect an increase in successful transfer cases from science to practice in the coming years. 

Even though the subject remains complex, and even though it will be years before fully functional biologically-printed organs can be implanted in humans, the goal is clear: 

There is no practical reason why someone who needs a transplant should not get one. 

And this is a cause we should all join. 

WWDC underscores Apple's unstoppable push into the healthcare market

Image: Apple

Last week, Apple's World Wide Developer Conference (WWDC) took place, with the company presenting news to 30 million Apple developers.

While Apple’s consumer events usually focus on new hardware, the WWDC is all about operating systems like iOS, macOS, and watchOS.

The developer community approaches the event with both joy and fear. On the one hand, Apple provides them with new functionalities and frameworks, among them those they can use to make their products better. On the other hand, there is always a risk that Apple will incorporate these developers’ products as features into its own products, killing their business. More on this phenomenon and why it's called "sherlocking" can be found here

Health announcements: Not mind-blowing but still impressive

But now to the content. We found CarPlay really exciting. It should also be a warning for healthcare companies to consider just how deep Apple is pushing into the OEMS sphere. 

The ideas in the healthcare sector were not surprising, although they did underline Apple's ambitions in the healthcare market. Two thoughts came to mind while watching the announcements:

Apple will kill the health tracker market

The health and fitness tracking on the Apple Watch is obviously getting better and better: 

  • Apple will include its new, FDA-cleared atrial fibrillation history feature into the Apple Watch ECG feature. 
  • Sleep tracking in watchOS 9 provides new insights with the introduction of sleep stages. Using signals from the accelerometer and heart rate sensor, the Apple Watch can detect when users are in REM, Core, or Deep sleep.
  • Apple continues to integrate features from professional fitness trackers. The Workout app, for instance, will soon measure users’ running form, heart rate zones, and new workout types.
With the new features, the market blurs between Apple's all-in-one smartwatch, and dedicated fitness or health trackers like Fitbit, WHOOP, or Garmin. The more features Apple offers in this field, the more difficult life will be for fitness and health trackers. 
  • With the old versions of its own watch, Apple can almost compete with average fitness trackers in terms of price. 
  • In the high-end market, differentiation is becoming increasingly difficult for specialized health trackers.  
Apple is eying the pharma market

According to Statista, the worldwide pharma market is more than twice as large as the medical technology market ($1.27 trillion vs. $0.58 trillion). And Apple has introduced a feature that, in retrospect, may have been the first step into this market. 

The new Medications feature for Apple Watch and iPhone helps users manage and track their medications, vitamins, and supplements.
  • Users can create custom schedules for their meds, whether they need to be taken multiple times a day or just once a week. 
  • Users can set up reminders to help stay on track. 
  • And in the U.S., users can receive an alert if there are potential critical interactions with other medications they have added to the Health app
The feature itself is not a business model at this time, but a potentially powerful key to the pharma market. 
  • Combined with the sensors on the Apple Watch, Apple can find out in detail how people have reacted to certain medications. This information will be extremely relevant for pharmaceutical companies, prescribers, and pharmacists. 
  • Apple knows when certain drugs are in need of a refill and is therefore in a great position to penetrate the online pharmacy market. 
All in all, there was little mind-blowing news from Apple in the healthcare market—yet there was a lot of news underscoring how under Tim Cook, Apple has increasingly become a healthcare company. 

Akili brings virtual ADHD therapy to Roblox

Image: Akili

In the last week, an unsuspecting company has emerged in the healthcare market: Roblox. 

Digital therapeutics (DTx) company Akili has announced that it will offer its ADHD treatment video game directly on the Roblox platform. 

Games as meds

Akili's EndeavorRx is the first FDA-approved digital therapeutic for the treatment of ADHD. It aims to activate neural systems by providing sensory stimuli and motor challenges to improve cognitive skills.

EndeavorRx is not expected to remain Akili's only therapy. Currently, the company is working on a treatment for brain fog caused by Long COVID. 
And Akili isn't alone in its plan to turn games into therapies. A few weeks ago, we covered DeepWell, a new startup from industry veterans from the gaming and medical industry. 

Distribution is key

Along with Roblox, Akili now aims to spread EndeavorRX even further. For this purpose, the game will be tightly integrated into the Roblox platform. 

Patients will not only be able to play the game directly on the platform, but they will also receive in-game rewards such as badges and pets. 

For DTx players, it is essential to be on platforms where the patients are—in EndeavorRX's case, on platforms popular among children. Every day, over 25 million users are active on Roblox. Almost half of them are under 13. 

The stage is set for the big digital health M&A spree

A few weeks ago, we predicted an M&A wave in which established healthcare players buy up digital health startups. 

Recap: Zombie unicorns become M&A prey 

We argued primarily about the target side of the equation: The tech market crash makes the public markets a no-go area for unprofitable tech startups, because they would lose a lot of their valuation here. Venture capitalists are also becoming more cautious, because the upside of an IPO is no longer in sight. M&A deals are often the only way out for these unicorns, which cannot take their natural route to the stock market. 

The buyer perspective: Cash triumphs once again

In recent years, low interest rates have made the stock market all about growth fantasy. Profitability didn't matter as long as the growth rates were right. But in 2022, the wind has changed, with profitability and cash flow being the keys once again. That is why solid old-economy companies have come full circle. They are currently winning compared to the acclaimed tech newcomers of recent years. 

This is true in all sectors, and especially in healthcare, as a comparison of four stock market indices shows:

  • The S&P500 as an indicator for established companies 
  • The S&P500 Health Care as an indicator for established healthcare companies 
  • The NASDAQ Composite as an indicator for tech growth stocks
  • The NASDAQ Health Care as an indicator for healthcare tech growth stocks

The graph shows that in the last year, growth companies have performed much worse than established companies.

The gap looks even more extreme in the healthcare sector, as healthcare growth stocks have been hit especially hard in the latest crash. 

The established healthcare companies, on the other hand, have grown well above the market average. 

Currently, healthcare companies that are profiting today are significantly better-valued than companies that promise future growth. 

The opportunity: Growth is a bargain

As we all know, the market wind will change again at some point. Just as some growth companies were overvalued last year, some are bargains in the current downturn.

And here is the opportunity for profitable healthcare companies: They can use their cash and their high valuation to go bargain-hunting for digital health companies.

Bottom line: We continue to believe that we will see a hot M&A autumn. 

Jonas Wagner is center manager of CUBEX 41 and CUBEX ONE, two MedTech startup hubs located in Mannheim, Germany. They support startups in the early stages and lay the breeding ground for successful growth. Both initiatives are embedded into the infrastructure of the Mannheim Medical Technology Campus and the University Medical Center Mannheim.

Before supporting medical technology startups, Jonas promoted innovations in the energy sector. Among other things, he led the hydrogen innovation cluster for the Rhine-Neckar metropolitan region.

“You should always ask questions. And if someone does not like the questions, you are probably on to something.”

Jonas Wagner (Center Manager, CUBEX41 and CUBEX ONE)

Series C
Diabeloop, a developer of machine learning software for diabetes treatment, announced a $74.9 million Series C financing round, led by LBO France.
DIABELOOP (2022-06-02) ↗
Series A
Digital health
Cara Care, a digital health startup offering digital therapies for curing chronic digestive diseases, has secured a $7 million equity financing round, led by Johnson & Johnson’s venture arm JJDC. 
FIERCE BIOTECH (2022-06-18) ↗
De Oro Devices has raised $2.8 million to commercialize its first technology, NexStride, which helps Parkinson's patients overcome freezing gait
TECHCRUNCH (2022-06-08) ↗
Bright Uroa developer of wireless, catheter-free urodynamic monitoring devices, announced the launch of its company with $6 million in seed funding.
MASSDEVICE (2022-06-09) ↗
Heart failure
Corvia Medical, a developer of an atrial shunt system for the reduction of heart failure symptoms, raised $54 million in funding.
PR NEWSWIRE (2022-06-09) ↗

We must stop accepting broken healthcare as normal

Last week, a video from a hospital in Essex went viral on Twitter. In the video, a nurse explains to patients in the emergency room that they will likely have to wait seven-and-a-half hours or more to see a doctor. 

She makes it clear to those waiting that they will likely have to stay overnight, saying, "We will make you comfortable; we will do our best and look after you, but please don't expect that you'll be going straight to a ward—that may not happen." 

This video is not from a developing country but from the United Kingdom. And it's not a rarity, as the countless comments under the video show. Here in Germany too, there are repeated reports of overburdened hospitals and the consequences for staff and patients. Overloaded healthcare systems have become the norm. Just as it has become normal in Germany for schools to be completely rundown. 

This is a shame.

As a rich society, it just shouldn't be normal to have people waiting an entire night for emergency care. Not to mention that medical errors are already a leading cause of death. And errors happen more often under pressure. 

I am convinced that technological innovations can do their part to improve our healthcare system. Digital patient management with linking to surrounding hospitals can, for example, help to better manage peaks in demand. Telehealth services can also help if some patients do not have to go to the hospital in the first place.

But I am convinced that technological innovations alone are not enough. We need to focus on the people in health care. We also need more personnel in hospitals and better working conditions for medical workers. To achieve this, medical professions must become more attractive. Among other things, we need better pay, mandatory rest periods and more flexible working hours. 

What do you think? What are the biggest levers to fix our healthcare systems?