The news: Real-world data (RWD) company Verana Health scored $150 million in Series E funding, led by Johnson & Johnson Innovation with participation from existing investors like pharma company Merck’s VC arm.
Here’s how Verana Health works: The startup leverages de-identified, unstructured data from patient registries to help inform projects like drug R&D.
For example, Verana uses data from its partners such as the American Urological Association and the American Academy of Ophthalmology to help pharma companies learn more about their patient populations.
RWD could help pharma cut R&D costs drastically: Data from companies like Verana Health and Komodo Health can help pharma take an already approved drug and apply it to new use cases, limiting extra R&D spending.
Under FDA guidance, drugmakers are increasingly leaning on RWD to create innovative treatment approaches.
Creating new applications for existing drugs will likely help companies like Janssen slash the high price of bringing a new drug to market, which can cost up to $3 billion.
What’s next? Janssen’s investment in Verana could signal that more pharma companies will invest in digital health entrants this year, which is good news for startups seeking fresh capital to scale rapidly.
In fact, Janssen has already racked up some digital health partners recently, and it wouldn't be surprising to see one of these partnerships blossom into an investment this year (similar to Verana Health).
Plus, companies like Bayer have already poured investment dollars into digital health startups over the past year: In June 2021, Bayer led symptom-checker app Ada Health’s $90 million funding round.
Bayer also has a Digital Health Partnership program it leverages to fund young companies’ expansion, which means it’s likely on the hunt for new digital health investments.