By Michael Helmstetter, Partner, Covenant Animal Health Partners, and President & CEO, TechAccel
Unlike the agtech investment space, animal health has traditionally been a quieter and lonelier ecosystem. It has also been a historically underappreciated investment market. These days, the animal health market mirrors the ag market in consolidations and shake-ups — with the recent Elanco IPO, the acquisitions of firms like Merck Animal Health and Zoetis among others, and mergers like Merial and Boehringer Ingelheim Animal Health last year.
Like the agchem and seed industry leaders, the animal health industry giants now find themselves in a period of internal focus to achieve scale and eliminate redundancies. During times of consolidations, R&D budgets tend to fall prey to intense internal scrutiny, and as in the ag industry, investments fund only the projects that promise top-tier returns.
That is exactly why there’s opportunity in animal health with viable products, stranded from development. Rapid advances in biotech, including genetic engineering tools, cloud biology and big data, are driving investment excitement and creating solid advances in agriculture, pharma and human health. Combine this uptick in technology with a rising tide of talented innovators, researchers and entrepreneurs in the animal health ecosystem, many of them getting their start as a result of the reshaping of the industry giants, and the sector is ripe for advancement.
Great opportunity exists to target the development of “revenue-ready” products through partnerships with external innovation programs. These “revenue-ready” products are solutions that leapfrog the research labs of the global strategic animal health firms. Private companies and partnerships can tackle the de-risking and advancement work, all the way through registration if needed, to deliver solutions to the industry — ready for branding and marketing and distribution.
There are plenty of other models experimenting in animal health — accelerators, incubators, university commercialization programs, mentoring programs — and there’s room for multiple solutions. With a focus not on competition, but on collaboration and innovation, the animal health industry can garner momentum, supporting companion and production animals. This once-quiet ecosystem can embrace a variety of models to produce the best results for the animals in our care.