Looking Ahead in Healthcare Investing: Focus on Tibion Bionic Technologies

At the beginning of this year, I was cautiously optimistic that 2010 would be a better year than 2009 for investments in healthcare information technology. Now that we have made our way through two-thirds of 2010, I'm happy to see that things are going well despite the fact that the U.S economy is not cooperating fully.  But the Bay Area startups are doing well and they've attracted a remarkable 45 percent of $6.5 billion in venture capital invested nationwide in the second quarter, up from 32 percent of $4.9 billion invested in the previous three months—all according to the NVCA.

The healthcare venture capital sector is among the strongest of the sectors. One of the reasons is the passage this year of universal healthcare in the U.S. which will bring 32 million additional Americans into the healthcare system. This, coupled with a growing emphasis in Medicare to improve the efficiency of healthcare delivery, opens an abundance of fresh opportunities for healthcare-related startups. Startups that help hospitals, doctors and pharmaceutical and biotechnology companies do more for less—whether it's with the increased use of information technology or a faster way to develop new drugs—are better positioned then they have been in years.

Investing in seed and early stage healthcare startups is what drives us.  We are seeking capital efficient investments—those deals that can reach an exit on less than $30M. We also like to leverage recent advances in related markets, like computers, software, microfluidics, wireless, mobility, molecular biology, or bio-mechanics.  Many of our investments also have a well-defined reimbursement strategy, rather than requiring a whole new way of getting paid. Mostly they are diagnostic deals rather than a pharmaceutical or a pure physical device. Essentially we like deals that bring Moore's Law to Medicine. A good example of our strategy is reflected in our investment in portfolio company Tibion Bionic Technologies

Tibion is currently engaged in raising a new round of financing, and is a maker of an intelligent robotic knee that is highly useful in stroke rehabilitation. In 2010, the company has made a dozen sales to big rehabilitation institutions, such as Whittier Rehabilitation and Good Shepard Rehabilitation hospitals, and its robotic knee has been purchased for research purposes at UC-SF, Stanford University and Good Samaritan Hospital.

There are more than 4.8 .million stroke rehabilitation patients in the U.S. alone, and Tibion offers them the biggest technological improvement in rehabilitation therapy in a quarter century. What makes Tibion especially exciting is  that it not only enables stroke victims to regain mobility more quickly and easily, but it also appears to help “rewire” their brains to foster the healing process. Rehabilitation centers are finding that patients continue to progress even after therapy with the Tibion device is completed. in part, apparently, because their brains have created new neural pathways– an encouraging positive development.

As Tibion continues to climb the learning curve, its goal is to create a smaller, lighter and less expensive version of the robotic knee. This knee could be taken home by consumers and be used instead of a cane, crutches or wheelchair. Despite challenges in the economy and the venture industry, this is a stellar time to be a venture capital firm if, like CCV, you have ample funds. At Claremont Creek Ventures, we are on the look-out for new investments and will be announcing something shortly, so stay tuned.