Opportunities for Pharma Companies in Digital Health

Pharma is betting big on digital health. Should your company tap into this emerging market?

Digital Health: The Future of Pharma?

Globally, the digital health market was valued at $211 billion USD in 2022 and is expected to grow by 18.6% (CAGR) from 2023 to 2030.

Digital health technologies include apps, wearables, diagnostics, biomarker collection and assessment, and various forms of AI (artificial intelligence). Of particular interest is mental health, real-world data, decentralized clinical trials, disease management, and virtual research.

While these innovations are not new, recent advancements—and the money that follows—is a strong signal of growth that will continue. The COVID-19 pandemic and social restrictions only accelerated this movement.

Digital health bridges the gap between pharma companies and the patient in ways other solutions can’t.

M&A Activity in Big Pharma & Digital Health

This past April, Pfizer Australia announced plans to acquire ResApp Health for $74 million. The company develops smartphone apps that diagnose and manage respiratory diseases based on the sound of a user’s cough.

Prior to that, AstraZeneca and Huma Therapeutics announced a $33 million deal for the pharma giant to gain access to their “hospitals at home” technology for decentralized clinical trials.

It’s a clear signal that even big pharma understands medicine is more than a pill.

Advantages of Staking a Claim in Digital Health

A major attraction is the agility health tech companies bring to pharmaceuticals and medicine – sectors known to be slower-moving. M&A activity along with equity deals allow companies to strengthen their position in the future of healthcare.

It’s a faster growth strategy compared to building from within, especially as it can take years to build and scale such innovations.

Mistakes to Avoid

Should your company enter the digital health market? If you are aiming for synergies and are looking for new, modern ways to interact with the consumer, digital health is a no-brainer. It’s just a matter of managing expectations.

Despite the clear promise, missteps have been made when pharma and digital health combine. This has been attributed to differing cultures and expectations between the sectors, resulting in less-than-stellar deals or collaborations that don’t materialize.

If you are looking to stake a claim in digital health, being aware of these differences is step one. Working with experienced business development partners can help you understand whether a deal is too good to be true, and how to manage expectations and protect your business if something goes wrong.

At Sosna + Co, we’ve worked closely with both digital health and pharma companies to identify the right opportunities – and avoid the wrong ones. To learn how we can help grow your business, get in touch with our team today.