Infertility, defined by the World Health Organization as a disease of the reproductive system that results in disability, has long been a taboo subject. However, there are signs that attitudes are beginning to shift.
This is linked to societal and lifestyle changes, with more people choosing to have children later in life. Moreover, infertility rates in both men and women are continuing to rise – according to IVI, infertility rates have been rising for both men and women globally for the past 60 years and NHS data shows that one in seven UK couples have difficulties conceiving naturally. This has pushed an increasing number of people to seek out infertility treatment; something that has been supported by consumer technology companies.
In light of these trends, and noticing its portfolio company Elvie, a femtech firm developing next-generation pelvic floor strength devices and breast pumps, had experienced a serious growth trajectory and unlocked latent demand in the female health market, Octopus Ventures decided to delve deeper into this taboo subject.
The London-based early stage health and deep tech investment firm wanted to see if Elvie’s situation was indicative of other parts of the fertility market in response to this growing demand.
A market ripe for disruption
Octopus Ventures’ report found that “this space has seen steady and significant growth over the last five years based on the kind of indicators that we look at – deal count, total VC investment, average size of those deals,” says Kamran Adle, an early-stage tech investor in the firm’s future of health team.
According to the report, investment into fertility related start-ups has almost quadrupled since 2014, with total investment reaching $2.2bn. The total deal count has increased almost twofold in the last five years from 47 in 2014 to 97 in 2019. As well as increasing in number, the average deal size almost doubled in size from $4.1m in 2014 to $7.73m in 2019.
These figures led Octopus Ventures to conclude that this is an industry ripe for disruption and investment. “This is a really exciting market, which has been suffering from under-investment and lack of innovation for so long,” notes Adle. “We believe we are at the cusp of seeing a step change.”
Over the next five years, Adle expects this growth to accelerate, “mainly because those initial steps are always the hardest, but as you get more and more mature companies, then they will attract greater funding”.
“There are some talented entrepreneurs building very exciting start-ups in the space. We believe many of them have the potential to radically disrupt the industry and backing from VCs will be crucial to driving this change,” Adle noted in a statement. He believes that more open discussion, awareness and interest in fertility treatment has supported the growth in the fertility start-up landscape.
Despite seeing “positive green shoots” budding for this sector, Adle notes that there are still some challenges that need to be overcome – particularly around affordability of treatments and attracting investment.
The Octopus Ventures report also concluded that further innovation will be needed to continue to satisfy the huge, and growing, latent demand in this sector.
The need for better infertility drugs
GlobalData’s 2019 analysis concurred with Octopus Ventures about the historic lack of innovation in the sector, but with optimism for the future. However, GlobalData’s report had a specific focus on the female infertility drug market.
GlobalData predicts that, because of a projected increased use of infertility drugs linked with people waiting until later in life to have children, the infertility drug market’s value will grow from $1.8bn in 2018 to $2.5bn in 2028.
The analytics firm predicts that this growth will be concentrated around an increase in assisted reproductive technology (ART) treatment rates. ART is an umbrella term for infertility treatments related to both a women’s eggs and a man’s sperm; the most common type of ART is in vitro fertilisation (IVF).
ART treatments are supported by a number of fertility drugs; there is a serious unmet need in terms of the quality of these products, particularly because the success rates for ART are between 20% and 30%. This is a big contributing factor to around 30% of couples undergoing IVF dropping out after unsuccessful cycles.
“A limited number of established companies compete in this space, and the strategy has mainly been to create improved versions of existing drugs,” explained GlobalData senior pharma analyst Kelly Lambrinos. “As such, the drugs used to treat patients have remained largely unchanged.” Research by S&P Global states that there have been virtually no innovative entrants into the infertility treatment market for around 40 years.
Lambrinos added: “Of particular note are the unmet needs for treatments that further improve success rate per ART cycle, orally and less frequently administered drugs during IVF treatment, novel treatments for improving IVF outcomes in reproductively older women and reducing the high IVF treatment dropout rates.”
Spotlight on Obseva and nolasiban
Looking to overcome some of these challenges is women’s health company ObsEva with its oral oxytocin receptor antagonist nolasiban (OBE001) to support ART. ObsEva did not respond to multiple requests for comment.
According to ObsEva, this drug has the potential to decrease contractions, as well as enhance uterine blood flow and the receptivity of the endometrium to embryo implantation. All these factors increase the chance of successful pregnancy and live-birth among patients undergoing embryo transfer for ART; this step in IVF is one of the major reasons for its high failure rate.
ObsEva is carrying out clinical trials of nolasiban in Europe and China. The company has slightly reoriented the patients for whom nolasiban will be most effective, however, it seems that the infertility drug could be approved in 2021 and 2022 in Europe, the US and China.
If approved, nolasiban would be the first novel drug for ART in decades. The GlobalData report concluded: “Ultimately, nolasiban will be a welcome addition to the therapeutic paradigm that will partially address the unmet need of improving embryo implantation rates during ART cycles.”
Verdict deals analysis methodology
This analysis considers only announced and completed deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.
GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.
More in-depth reports and analysis on all reported deals are available for subscribers to GlobalData’s deals database.