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Is AI Set to Supercharge Medical Devices?
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By Brian Gormley, WSJ Pro
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Good day. Medical devices—catheters, stents, pacemakers—are as vital to medicine as any wiz-bang drug. Yet this corner of the medical world births far fewer unicorns than the biotech or technology sectors. Integration of artificial intelligence may change that, entrepreneur John Beadle says.
Beadle is co-founder and managing partner of Aegis Ventures, a startup studio that teams with entrepreneurs to launch companies. The firm this week released a white paper that argues how the combination of devices and software is expected to mint more medical-device superstars.
Medical-device invention is often long and costly, similar to drug development. But in biotech, startups are often acquired long before their drugs are approved. Not so in devices, where a small and cautious cast of acquirers typically waits for a startup’s product to receive regulatory approval and is generating revenue before pursuing a deal.
Beadle sees trends that could flip the leverage to device upstarts. The cost of hardware, such as sensors, is falling and adding AI can, for instance, enable a single device to perform several high-value tasks, he said.
That is also a theme playing out across the tech sector as AI becomes increasingly intertwined with the physical world in areas such as manufacturing and autonomous vehicles.
Aegis portfolio company Optain, for example, uses the retina—the light-sensitive layer in the back of the eye—to screen for various diseases. It involves using a robotic camera, AI and tele-ophthalmology to detect conditions such as diabetic retinopathy, a complication of diabetes.
The convergence of AI and hardware won’t be universal; there is still a place for classic medical devices, Beadle says. Developers of software-powered devices also could face hurdles such as the need to secure new billing codes and reimbursement for novel treatments.
That is a job for innovators like Aegis.
“It’s going to take a dedicated effort engaging with lawmakers from groups like us,” Beadle said.
And now on to the news...
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Author and biotech executive Jeremy Levin says venture capitalists should ‘focus on high innovation.’ OVID THERAPEUTICS
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Biotech insider sounds the alarm. The U.S. biotechnology industry is healthier than it has been in years—stock prices and mergers and acquisitions are surging and companies are making breakthroughs in diseases, such as pancreatic cancer, that once seemed intractable. Yet the foundation for that success is buckling, argues biotech executive Dr. Jeremy Levin in a book published Tuesday, “Biotech in the Balance: Saving a Strategic Industry in an Age of Distrust.”
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Levin, co-founder and executive chairman of biotech concern Ovid Therapeutics, says politicization of science undermines trust in it and threatens the U.S.’s lead in an industry it created 50 years ago, when venture capitalist Robert Swanson and biochemist Herb Boyer founded Genentech.
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He also fears that many venture capitalists have lost the nerve required to birth the next Genentech.
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While some still back early-stage science, many others would rather fund later-stage or me-too compounds, he says. As a result, “Incremental changes are touted as massive changes—as opposed to the early days, where you saw Genentech and others being financed with the dream, the hope that something remarkable would come out,” Levin said.
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Japanese Alzheimer’s Startup Sound Wave Raises About $17 Million
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Japanese medical startup Sound Wave Innovation, which aims to cure Alzheimer’s disease with ultrasound therapy, has raised about $17 million from investors, including Singapore-based venture capital firm iGlobe Partners. Sound Wave said Monday it raised 2.65 billion yen, equivalent to $16.7 million, to fund an ongoing clinical trial due to be completed by the end of the year. Besides iGlobe, other investors in the financing round included existing backers such as Tokyo-based investment firm Fiducia and Sumitomo Heavy Industries, as well as domestic and international venture capital firms,
medical companies and individual investors, the startup said.
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Sound Wave is planning a potential initial public offering in 2028, with the next funding round expected toward the end of 2026, according to a person familiar with the company’s planning.
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Bristol-Myers Squibb Brings Anthropic’s Claude to 30,000 of Its Staff
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OpenAI Is Preparing to File for an IPO Very Soon
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OpenAI has been working with bankers to prepare to file for an initial public offering in the coming days or weeks, according to people familiar with the matter. Bankers at firms including Goldman Sachs and Morgan Stanley have been helping the AI giant on a draft IPO prospectus it plans to file confidentially with regulators soon, possibly as early as Friday, some of the people said. The goal is for OpenAI to be ready to go public as early as September, some of the people said.
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Anthropic Revenue Surges, Set to Post First Profit
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Anthropic’s revenue is set to more than double to $10.9 billion in the second quarter, an explosive rate of growth that will help it turn an operating profit for the first time. The company disclosed the figures to investors as part of an ongoing funding round that is likely to push its valuation above OpenAI’s.
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People
Healthcare and life sciences growth investor Petrichor appointed Don Hardison as operating partner. He most recently served as president and chief executive officer of Biotheranostics.
VahatiCor, a startup developing interventional therapies for coronary microvascular dysfunction, appointed Harry D. Rowland as chief executive officer. He was previously president and CEO of Endotronix.
Exits
Medtronic agreed to purchase SPR Therapeutics, a developer of temporary, percutaneous peripheral nerve stimulation therapies for chronic pain management, for about $650 million in cash.
Cohere is expanding its reach in the healthcare and life sciences sectors with the acquisition of Reliant AI, a data analytics platform for biopharma.
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Nourish, a New York-based metabolic health clinic provider, scored $100 million in Series C funding. Menlo Ventures led the round, with Partner J.P. Sanday joining the board. Investors including Thrive Capital, Index Ventures and Maverick Ventures also participated.
Commure, a Mountain View, Calif.-based startup deploying advanced AI and agents across health systems and practices, picked up a $70 million investment at a $7 billion post-money valuation. General Catalyst led the funding, which included participation from Sequoia Capital and others.
Oorja Bio, a Houston-based startup developing therapies for fibrotic and cardiopulmonary diseases, launched with $30 million in Series A funding from Westlake BioPartners.
Vital Signals, a startup helping people understand and manage blood pressure over time, landed more than $15 million in funding led by XYZ Venture Capital.
Vortex Imaging, a startup developing a computational ultrasound system, picked up $12 million in funding from investors including 10D Ventures.
Kin Health, a Los Angeles-headquartered free app that records medical visits and turns them into plain-language summaries, collected $9 million in seed funding. Maveron led the investment, which saw participation from Town Hall Ventures and several others.
Neurosoft Bioelectronics, a Switzerland-headquartered neurotechnology startup developing brain-computer interfaces, nabbed $7.5 million in seed funding led by Skybound Venture Capital.
Blank Bio, a San Francisco-based applied AI research lab training foundation models for RNA, closed a $7.2 million seed round from investors including Define Ventures, Ripple Ventures, SignalFire and Y Combinator.
Century Health, a New York-based AI-powered platform that automates the curation of fragmented clinical data, was seeded with a $5 million investment. Origin Ventures led the round, which included contributions from InnovateHealth Ventures, 25madison and Next Play Ventures.
Violet Therapeutics, a Boston-based startup developing therapies for neurodegenerative disease, snagged nearly $4.8 million in seed extension financing from investors including Lifespan Vision Ventures and Dementia Discovery Fund.
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The cruise ship MV Hondius has been at the center of the recent hantavirus outbreak. CHRIS MCGRATH/GETTY IMAGES
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