Brown University / Rhode Island Hospital Providence, RI
Kimberly Ho, MD1, Daniel Marino, MD, MBA2, Rushi Talati, MD, MBA2, Saif Laljee, MD2, Sameer Berry, MD, MBA2 1Brown University / Rhode Island Hospital, Providence, RI; 2NYU Langone Health, New York, NY
Introduction: Innovation in gastrointestinal (GI) fields is experiencing several favorable tailwinds. With new devices, medications, therapeutics, and technology, there is an increasing trend of venture capital (VC) investment in GI. Understanding the allocation of VC investment can act as a surrogate marker for the future direction of GI. This is the first analysis of VC investment in GI.
Methods: We conducted a retrospective cross-sectional analysis of VC investments in gastroenterology from January 1st, 2012 to December 31st, 2022. Data was obtained from the PitchBook private capital market database using the search term “gastroenterology,” “gastrointestinal health,” “gastrointestinal disease,” “gut health,” “digestive health,” and “digestive system.” A total of 796 unique deals were reviewed individually, and the number and value of deals were analyzed across different industry sectors.
Results: 486 VC deals involving 1,095 active investors and totaling nearly $4.51 billion USD were identified, distributed among 351 companies. Annual VC GI investments grew from $74.6 million in 2012 to $941 million in 2022, representing a 1,162% increase (Figure 1). In recent years, there has been an outsized number of investments in technology, reflecting approximately 20% to 25% of deals annually, despite contributing less than 20% to the total deal size. The most active investors in gastroenterology deals since 2012 are summarized in Table 1.
Discussion: Our study underscores a notable rise in both the value and volume of VC investments within the gastroenterology sector over time. Particularly noteworthy is the escalating allocation of funds towards technology, pharmaceuticals, and devices which have skyrocketed over the past years, suggesting a long-term financial interest in the success of gastroenterology innovation. The steady funding in devices and technology may correlate with increasing research funding about the innovative ways to treat common GI disorders. This study did not include 2023 and 2024 investments due to the retrospective nature of Pitchbook. The increasing trend in both deal size and count observed suggests a burgeoning landscape ripe for continued innovation. Further research will be needed to explore the impact of VC funding in the field of gastroenterology.
Figure: Figure 1. Annual total venture capital investments in gastroenterology and number of deals distributed by industry sectors, 2012 to 2022. Disclaimer: Data were reviewed by the authors and not by PitchBook analysts. a. Technology includes biotechnology, medical records system, business and production software, application software, and other healthcare technology systems. b. Devices and supplies include surgical devices, therapeutic devices, diagnostic equipment, medical supplies, monitoring equipment, alternative energy equipment, and other devices, supplies, and equipment. c. Pharmaceuticals and therapeutics include pharmaceuticals, drug discovery, drug delivery, and other pharmaceuticals and biotechnology. d. Inpatient and hospital services include hospitals/inpatient services. e. Outpatient and clinical services include clinics/outpatient services. f. All other categories include buildings and property, decision/risk analysis, BPO/outsource services, specialty retail, laboratory services, food products, beverages, animal husbandry, information services, personal products, restaurants and bars, environmental services, discovery tools, horticulture, enterprise systems (healthcare), distributors (healthcare), practice management (healthcare), outcome management (healthcare), other services (B2C Non-Financial), other consumer non-durables, other commercial products, and other healthcare services. From January 1, 2012 to December 31, 2022.
Note: The table for this abstract can be viewed in the ePoster Gallery section of the ACG 2024 ePoster Site or in The American Journal of Gastroenterology's abstract supplement issue, both of which will be available starting October 27, 2024.
Disclosures:
Kimberly Ho indicated no relevant financial relationships.
Daniel Marino indicated no relevant financial relationships.
Rushi Talati indicated no relevant financial relationships.
Saif Laljee indicated no relevant financial relationships.
Sameer Berry indicated no relevant financial relationships.
Kimberly Ho, MD1, Daniel Marino, MD, MBA2, Rushi Talati, MD, MBA2, Saif Laljee, MD2, Sameer Berry, MD, MBA2. P4927 - Venture Capital Investments in Gastroenterology from 2012 - 2022: A Window into the Future of Gastroenterology, ACG 2024 Annual Scientific Meeting Abstracts. Philadelphia, PA: American College of Gastroenterology.
