San Diego-based pharmaceutical company Daré Bioscience describes itself as one of the few biotechnology companies focused on women's health, noting that the broader industry often overlooks this area. However, the company's CEO, Sabrina Johnson, says this identity can present obstacles. She mentioned that investors sometimes hesitate to fund research in the name of women's health because they are unfamiliar with the field. Johnson, who has led Daré since 2017, said, "How do we frame the conversation so that it's clear—at the end of the day, this is healthcare."

The development of drugs for diseases that affect only women or disproportionately affect women has long been neglected, leading to reduced venture capital for startups and few treatment options for conditions such as endometriosis. Meanwhile, reproductive medicine has come into focus following the U.S. Supreme Court's overturning of abortion protections in Roe v. Wade, as well as lawsuits against the FDA's approval of the abortion pill mifepristone.

The challenges have also brought attention. Notably, the Biden administration launched a women's health research initiative in November of last year, aiming to promote more funding and accelerate research. Private investors have poured more money into women's health companies, although the biotech downturn over the past year seems to have cooled activity in 2023.

Erika Seth Davies, CEO of Rhia Ventures, a nonprofit focused on maternal and reproductive health equity, said, "There is growing recognition that women's health has been historically underinvested in, and therefore there are opportunities for innovation and significant returns." Rhia Ventures has spun off a venture capital arm.

Investment barriers

The term "women's health" covers a broad range. It often refers to conditions specific to female anatomy or those more common in women than men. This is often understood as reproductive health, involving pregnancy, fertility, and menopause. But it also includes gynecological diseases such as endometriosis or uterine fibroids, as well as vaginal and urinary tract infections. Breast, cervical, and uterine cancers are often specific to women, while conditions like migraines and osteoporosis affect women more than men.

Johnson said, "On one hand, calling it women's health has tremendous opportunity because it focuses on the population affected by the disease; but on the other hand, these are fundamentally medical conditions." While oncology receives significant attention and funding, other diseases under the women's health umbrella do not, which can affect the variety of available treatments. Lack of funding is often a major reason biotech companies stop studying drug candidates or prioritize other programs. Large companies have also chosen to pivot to other areas: Bayer, once a major player in women's health, said last year it would shift its research focus from women's health to immunology, rare diseases, and neurology.

Marcel van Duin, Chief Scientific Officer of women's health company Organon, said, "The limited investment in women's health R&D across the entire ecosystem of academic and industrial research has hindered the innovation needed to support women and all stages of their lives." A lack of clinical trial data also slows progress. Female participants were underrepresented in early clinical trials, and it wasn't until 2015 that the U.S. National Institutes of Health included sex as a biological variable in the design of its funded research. Insufficient information on sex-specific outcomes makes it harder to determine how the effects of potential treatments vary.

Raysa Bousleiman, healthcare vice president at Silicon Valley Bank (now owned by First Citizens Bank), said, "We lack understanding of women's diseases and of diseases that may affect women differently or disproportionately. Because of this lack of data, these life science companies trying to develop solutions face more difficulties." Bousleiman believes terminology also plays a role: "A lot of women's health carries stigma. In conversations with founders in women's health, biopharma, and other fields, I find that many men don't even know these issues exist. So you don't invest in what you don't understand."

The numbers certainly prove this. According to SVB data, in 2019, $122 billion was invested in 3,225 biopharma deals in the U.S. and Europe, while women's health biopharma companies received only $1.3 billion across 60 deals. Additionally, a 2021 analysis of NIH-funded research found that diseases primarily affecting men received more funding than those affecting women.

The mifepristone spotlight

Since last year, the FDA has been embroiled in litigation over its 2000 approval of the abortion pill mifepristone, which is widely used in the U.S. to terminate pregnancies. The conservative group "Alliance for Hippocratic Medicine" sued the FDA and the Department of Health and Human Services in March of last year, claiming the agency illegally applied an accelerated approval process to the drug. A Texas district court judge later ruled to suspend the drug's approval, and the Biden administration and the mifepristone manufacturer appealed. The initial ruling raised concerns across the broader biotech industry, with some arguing the case undermines the FDA's authority and could set a precedent for any group to sue the FDA over controversial drug approvals. Biopharma leaders have spoken out against the lawsuit, which has introduced new risks for investors and companies in reproductive health.

Davies said, "The mifepristone case will have implications for biomedical R&D far beyond women's health. The disruption of politicizing systems and processes that should be based on data and evidence will touch every corner of the healthcare industry." The case is now before the Supreme Court, which is expected to rule this spring on whether access to the drug should be restricted. (In 2016, the FDA expanded the drug's use from seven weeks to ten weeks of pregnancy. A few years later, in 2021, the agency allowed prescriptions to be provided by mail.)

Although the challenge to mifepristone is particularly prominent, it is not the first time FDA decisions on reproductive medicine have been challenged. The agency's recommendation to allow over-the-counter use of Plan B emergency contraception was overruled in 2011 by the Obama administration's Secretary of Health and Human Services. The FDA later approved over-the-counter sales after further litigation. The spotlight on the mifepristone case could be a double-edged sword. Bousleiman said that while it brings the prospect of new legal risks for reproductive medicine, it also shows the demand for safe and effective drug solutions. Recently, the FDA took similar action with a contraceptive sold as Opill, approving it last year as the first over-the-counter oral contraceptive.

van Duin said, "Success stories like this are important, especially in driving investment in women's health and encouraging others to pursue a new wave of innovation that benefits women."

A growing market?

One of the most active investment areas in women's health is so-called "femtech." These technology-centric companies operate in the healthcare industry but focus on women-specific needs, such as fertility and pregnancy. After the Supreme Court overturned Roe v. Wade in 2022, demand for such services surged and continued to drive the industry last year. The growth of femtech could have ripple effects on drug development. Bousleiman said, "Many digital health companies point out the fact that women's health is neglected. So this could also bring investor attention back to the R&D side, because not all women's health issues can be solved with an app or seeing a doctor."

R&D investment does seem to be rising. In the first nine months of 2023, venture capital funding in women's health grew 8% compared to the same period in 2022. Bousleiman said that compared to the broader life sciences slowdown last year, women's health has more like hit a "speed bump." Investors are also looking at women's health companies outside reproductive areas. According to an SVB report, in the third quarter of 2023, these companies received a record $435 million in a single quarter. Although the amount pales in comparison to typical financing in the broader biotech sector, the data indicates a positive trend.

Johnson said, "Success breeds success, and funding will follow." Investor support could yield returns beyond imagination. While only about 1% of R&D investment goes to women-specific diseases outside oncology, Johnson said it has still spawned a number of drugs generating over $500 million in annual revenue. In the U.S., women make many healthcare purchasing and usage decisions, according to consulting firm Oliver Wyman. Additionally, according to a Deloitte report, working women in the U.S. spend about $15 billion more annually on out-of-pocket medical expenses than men. The extra spending is partly due to pregnancy-related costs, but also because women are more likely than men to seek treatment and are more prone to misdiagnosis.

Davies said, "A healthcare system that doesn't serve everyone actually undermines U.S. economic growth and prosperity. Investors certainly care about returns on investment, but they must also pay close attention to the health of the broader economy."

Looking ahead

According to SVB data, total venture capital investment in women's health has more than quadrupled since 2018, while overall healthcare investment has grown 28%. Acquisition activity has also increased, with 15 companies acquired in the past two years, surpassing the total of the previous four years. Nevertheless, the life sciences market downturn has affected the sector, with less investment and fewer "exits" (such as IPOs or acquisitions) in 2023 than in 2022. Since life sciences is capital-intensive, partnerships with larger companies help bridge the gap. For example, Organon and Daré partnered in 2022 to bring Daré's bacterial vaginosis gel to market.

Women's health companies, like all biotech companies, also need to attract generalist investors to provide more funding as the company grows. In a recent webinar, Bousleiman pointed to positive signs in this regard: "We've seen some impressive actions from these types of companies this year, and we believe this will spark more investor interest in the sector." The Biden administration's new women's health initiative could further help. Launched on November 13, the initiative asks relevant agencies to propose recommendations within 45 days on how to advance women's health research. Perhaps relatedly, a week later, the FDA announced plans to hold a workshop with the Duke-Margolis Center for Health Policy on developing drugs to prevent preterm birth. Organon CEO Kevin Ali said his company is ready to contribute to the initiative.

Organon's van Duin added, "We will certainly see the impact of this push—along with further investment in women's health innovation involving academic scientific research, patient organizations, philanthropic leaders, venture capital, and industry R&D stakeholders—on the overall women's health market." Executives and investors are optimistic about further investment in women's health. Johnson said, "It's time, and I think all the right elements are in place."

Editor's note: This story has been updated to more accurately describe Rhia Ventures.