Startups See Gold in Heaps of Patient Data

Tony Hagen @oncobiz
Published: Wednesday, Dec 28, 2016
Ranga Saragarajan, PhD

Ranga Saragarajan, PhD

Boston-based Berg Health is attempting to do away with a traditional form of scientific inquiry in an attempt to find better answers. “We don’t believe in hypotheses,” says Ranga Sarangarajan, PhD, chief scientific officer for the 8-year-old startup, which is looking for new oncology drug opportunities by distilling data from biological samples and patient health records. “It’s a more efficient process, but it also takes away our biases of what we think about a drug target, its role in influencing pathways that contribute to disease, and the potential for development of treatment,” Sarangarajan said.

Berg Health is among an outpouring of big data startups that have attracted venture capital funding on faith that super-fast computers directed by powerful algorithms can lead to health solutions and business success (Chart 1). Many believe that data for these initiatives are already available, buried in databases of patient information. In fact, Berg Health was co-founded by Silicon Valley, California, real estate tycoon Carl Berg partly on the principle that exploiting those repositories could significantly reduce the cost and time needed for drug discovery. Besides in Silicon Valley, pockets of digital health entrepreneurship are developing across the country (Chart 2).

Other prominent digital health startups are crunching health data in different ways. One of them is Flatiron Health, a four-year-old New York City company that in addition to selling electronic health record (EHR) software is plumbing real-world patient data to help physicians and researchers better understand how patients will respond to certain drugs. Company Chief Medical Officer Amy Abernethy, MD, PhD, explained that drug approvals often are built on clinical trial patient cohorts that differ from the groups of typical patients in the real world.

Companies mining the promise of big data also include Benefits Science Technologies and Ayasdi. Benefits Science Technologies, of Massachusetts, is capitalizing on employers’ desire to know more about the health of their employee populations and why their health plan costs are changing. The company aggregates patient data as it becomes available and funnels that through dashboard-style monitoring systems that explain the ow of healthcare dollars.

Palo Alto-based Ayasdi enables physicians to find optimal care pathways using analyses of health data from patient populations that are local to the clinics that subscribe to the service. One of Ayasdi’s largest contracts is with the Mercy hospital network—a Midwestern group that serves millions of patients. The company claims its system delivers better outcomes and lower costs.

Investor money is pouring into this market. In 2015, digital health venture capital funding reached $4.5 billion, up from slightly over $1 billion in 2011, according to Rock Health. The single largest venture capital deal of 2015 measured $200 million and went to NantHealth, developer of the GPS Cancer test, which the company says goes far beyond biomarker assays and actually predicts drug efficacy per patient by looking deeply into cell biology and RNA. By the end of 2015, the company had raised a total of $680 million. In June of 2016, NantHealth launched an initial public offering.

Many of these companies fall into the category of “garage biotechs.” They are often seeded with money from venture capitalists. These companies may end up being sold or become established as independents. What they have in common is super-fast processing and an idea for how to capitalize on big data.

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