Just weeks after its debut, the PharmStars digital health accelerator nabbed its first pharma members—Boehringer Ingelheim, Eli Lilly and Takeda.
The new matchmaking company is the first of its kind to focus specifically on connecting drugmakers to digital health startups.
Founder and CEO Naomi Fried decided to launch the company after noticing a disconnect between pharma companies searching for digital health solutions and the entrepreneurial tech startups that were coming up with new ideas.
Startups were anxious to partner with pharma companies because of their established distribution channels, deep pockets and experience and business savvy, while pharma companies were interested in the ideas digital health companies were building.
Yet the two didn’t seem to consistently connect—Fried calls it the “pharma startup gap.”
She launched PharmStars this month with a mission to not only bring the two together but also to propel success. How? Selecting the proper candidates, educating both sides on each other’s business and intentions, and then finally introducing them.
PharmStars has invited digital health startups to apply and will choose 10 participants for its inaugural class, which starts in September. The selected cohort will go through a college-style 10-week program called PharmaU, where startups learn what they need to know about pharma: the basics and more, Fried said, such as how companies are organized and function, the regulatory issues the face, their financial pressures and even pharmacovigilance.
Meanwhile, pharma companies get their own schooling. The Executive Ed workshops and seminars tackle topics such as the value of buying versus building, how to create a culture to support digital health and how to better engage legal and regulatory divisions in adopting digital strategies.
The PharmaU program finishes with a showcase event where the “graduate” startups pitch their ideas to the group and meet with the pharma company members.
Fried and Managing Director Laura Gunn said the digital health startup cohorts of 10 will be thematically linked, for instance by therapeutic area or specialty.
While the startups pay a “nominal fee” as participants, the bulk of PharmStars' revenue will come from pharma companies’ paid memberships.
Digital health funding is booming with an estimated $6.7 billion spent in the U.S. in the first quarter of 2021, according to a Rock Health report. It was the biggest quarter yet in Rock Health's 10-year history of tracking digital health investments. The average deal size also jumped to $45.9 million, up from $31.7 million in 2020.
Yan Chow, M.D., former head of digital medicine at Amgen, said in PharmStars’ announcement, "There is both tremendous opportunity and inherent challenge in integrating digital health into the traditional pharma model. PharmStars' deliberate focus, well-developed curriculum, mentoring, and depth of expertise will catalyze successful engagement between pharma and startups."