Fortifying Healthcare Innovation from the Frontlines
Investing in the future of healthcare is a major driving force at Phillips-Medisize, LLC, Molex Medical and Pharmaceutical Solutions and our parent company, Koch Industries, Inc. Each organization taps into incredible stores of knowledge, decades of expertise and longstanding trusted relationships to continually support innovative solutions that change people’s lives for the better.
At Molex Ventures, we are part of a fast-growth sector that leverages corporate venture capital (CVC) to propel entire industries forward. According to CB Insights, global CVC reached a record high last year, soaring to $73.1B for a 24% increase from 2019 despite an overall decline in CVC-backed deals. Interestingly, CVC-backed funding for digital health companies jumped 68% year-over-year to an all-time high of $8.8B in 2020.
What’s most exciting about my job is the opportunity to work with innovative startups that align with Molex’s business expertise across a multitude of areas, including healthcare, automotive, Industry 4.0, datacom and telecom, networking technology, power electronics, and next-gen manufacturing. Our investments empower exploration of the unknown while pushing the envelope on new possibilities through experimentation and investigation.
In the healthcare sector, in particular, our sweet-spot investments involve early-stage companies with a novel product or solution that fulfills an unmet market need or solves a critical problem in a novel way. Our rubber-meets-the-road resources are an excellent complement for any startup striving to prove its value proposition in clinical trials and regulatory approval, followed by an immediate need to ramp manufacturing and accelerate time to market while reducing cost and risk.
For that reason, we’re always on the lookout for healthcare pioneers aligned in areas where we have a strong business presence and an opportunity to apply our proven product design, development and delivery expertise. We’re most interested in investments that span the continuum of patient care—from game-changing drug delivery, diagnostic and MedTech devices to breakthroughs in connected health and consumer wellness.
We gauge the market, technology and team to determine the worthiness of each new idea for improving current standards of care, especially in treating chronic disease. The latest information released by the Centers for Disease Control and Prevention reveals that six in 10 U.S. adults have a chronic disease. This puts an undue burden on the cost of healthcare delivery as 90% of the nation’s $3.8 trillion in annual health care expenditures are for chronic and mental health conditions. Preventing chronic disease, as well as better managing symptoms and driving adherence to care, always piques our interest, but performing due diligence on every great business idea includes careful analysis based on a list of strategic synergy boxes that must be checked before we move forward.
We closely evaluate each potential CVC infusion from the inside out because it’s not simply a financial transaction but a commitment to building a long-term relationship with the startup’s leadership team. In healthcare, there is an overarching focus on intellectual property (IP) along with the individuals responsible for creating the IP or giving it form and function. For that reason, our role often evolves into equal parts board advisor and project manager, especially as startups undergo critical clinical trials, approach the FDA approval stage and begin to scale volume manufacturing. We are there every step of the way to offer seamless access to resources and capabilities while helping bolster overall confidence in the company’s market entry.
Creating Virtuous Cycles of Mutual Benefit
A major tenet of Koch Industries’ Market-Based Management® principles is the concept of creating virtuous cycles of mutual benefit, which helps guide and inform our CVC strategies. We take a holistic approach in determining long-term value creation—measured not just by potential financial returns but also by untapped possibilities to improve patient care.
Most recently, we participated, along with Novartis Pharma AB and others, in a $39.9M funding round with Credence MedSystems, Inc. An innovator in injectable drug delivery devices for the biopharmaceutical industry, Credence checked all the boxes for Molex Ventures, starting with a family of syringe systems with proprietary needle retraction technology and syringe reuse prevention to improve drug delivery safety and usability. Equally impressive are the company’s dual chamber syringe platform offering single-step mixing and injection for drugs that require reconstitution at the time of delivery and its connected health solutions offering the potential to impact chronic disease management.
I’m pleased by today’s announcement from Credence MedSystems, which highlights continued collaboration with Phillips-Medisize to ramp production of the Credence Companion® and Dual Chamber Reconstitution Systems at Phillips-Medisize’s Letterkenny, Ireland site, as well as our new facility in Poland. As part of this expanded relationship, both organizations are poised to deliver a truly differentiated injection system to market for reciprocal gain and the opportunity to improve the patient experience dramatically.
Another ideal candidate for Molex Ventures is Windgap Medical, Inc., which created a novel epinephrine autoinjector to address many unmet patient needs, including portability, temperature stability, ease of use, affordability and compliance. Funded in 2019, Molex Ventures’ investment spurred a cooperative effort to positively impact patient adherence, while our hands-on approach and mutual trust has supported the company’s growth trajectory. Most recently, our collaboration has entailed greater involvement from Phillips-Medisize in drug and reagent handling on Windgap’s behalf. In many respects, Windgap is the gold standard as an investment partner. They welcome our involvement in growing their spheres of influence throughout the industry while providing much-needed resources and advice across many aspects of their fast-growing business.
Another outstanding investment example is Aerami Therapeutics, which is developing a new generation of inhaled therapies to treat severe respiratory diseases. As a testament to Aerami’s focus on optimizing the precise delivery of therapeutics to the lungs in seconds, the company has recently entered talks with FoxWayne Enterprises Acquisition Corp. for a public offering through a merger with FoxWayne, a publicly-traded special purpose acquisition company (SPAC).
When I look out on the horizon, I anticipate a revolution in point-of-care delivery led by innovators, such as the ones listed above and others still to be named. To better understand what lies ahead and participate on a global level, Molex Ventures joined as a Limited Partner in a venture fund, Hermed Capital, together with Fosun Pharma, a leading global pharmaceutical and healthcare provider in China. We see China as a major growth market for healthcare. We are eager to witness transformations taking place across this burgeoning landscape while building important business relationships to create an endless loop of virtuous cycles of mutual benefit.
Having a global view keeps us grounded on evolving trends and the people behind them. Still, since you never know where the next great product idea will come from, I also take advantage of Molex’s internal incubation program. Serving as a catalyst for innovation within the organization, this program brings together engineers, product developers and business leaders with a wide range of experiences and expertise.
Projects selected for the incubation program are evaluated against the same criteria Molex Ventures uses to gauge the feasibility of any startup. We follow their path of experimentation and invest wisely in the projects with the greatest potential for market success. A total of 15 teams have gone through the rigorous incubation program to date, with several commercial launches and one truly blockbuster product in the wings.
Envisioning a possible future full of life-changing and life-saving solutions and products is the most exciting part of my job, especially given the incredibly fast pace of market disruption. From my vantage point on the frontlines, innovation is always within reach—it just takes commitment, collaboration and leadership to bring possibilities to life.