Finding the Perfect Target.

Digital Health Due Diligence

When it comes to engaging with digital health providers, our clients have many options. We deliver expert assessments on potential targets on tight schedules – from red flag analyses to extensive commercial due diligences. ⬢

Spotlight

Digital Health Due Diligence (Whitepaper)

1. August 2022

Our case study and framework showcases the relevant dimensions and questions to be asked when considering a DiGA acquisition.

Some Of Our

Services

Build-or-Buy-Analysis

To build, or to buy, that is the question.

A decision not to be made in haste – as it is critical for success and depending on multiple factors like: size, budget, resources, the availability of targets, and potential target fit – but most importantly on the acquirer’s strategy and company culture. It can be a shock for both sides if you are a multinational pharmaceutical company used to meticulous production processes, acquiring a 10-people agile app development company. Just having the software without the developers who have left is dead capital.

We know from experience what works and what does not. We provide structured guidance for our clients to make an informed decision whether to acquire a digital health solution provider or to build a service from scratch within the context of the German healthcare system.

Commercial Due Diligence

In a Due Diligence process, it is critical to ask the right questions. We know how to validate our client’s investment hypotheses.

In a Due Diligence process, it is simply critical to ask the right questions. We know how to validate our clients’ investment hypotheses.

Our qualitative analyses of the acquisition target provide clarity on the target’s fitness for their chosen reimbursement path, their current market performance, market penetration, and how their commercialization strategy can be improved. Very often, only the product or service itself is in the scope of an acquisition – neglecting the required efforts to monetize it within the acquirer’s organization.

We provide a profound understanding of all key drivers of the business case, and a reality check based on market insights and industry experience to calibrate the confidence level.

Technical Due Diligence

Technology should not be a black box.

We open the black box of your target’s technology and assess if the often intangible pieces of software and infrastructure are good value for your money.

We answer your most important questions: What is the quality of the software and architecture? Does the development process follow state-of-the-art practices and can the software be maintained? Is the architecture a dead-end or can it be scaled without significant changes? What is the necessary level of software compliance, e.g., is a password policy required by the regulator and does the software fulfil these requirements? Does the software follow OWASP standards without leaking sensitive data if, e.g., HTTP status messages are not managed?

Digital Oxygen and its technology partner analyses your target’s software, architecture, and development processes to provide a concise assessment – in a report that also someone without a degree in advanced computer science can appreciate.

Red-Flag Due Diligence

Some details are more relevant than others. Sometimes, understanding the key issues is enough.

We would be happy to turn every stone during a due diligence, but often this does not fit to the acquirer’s timeline or budget. Our experience in the digital health markets allows us to cut right to the chase. We pin-point the target’s most pressing challenges in their specific market environments – such as potential roadblocks in the DiGA listing process.

We provide our clients with everything they need to know to make an informed decision – fast. Nothing more but also nothing less.

Target Scouting

Following a systematic approach reduces unwelcome surprises further down the line.

We know the digital health landscape in Germany by heart, including DiGA and DiPA. Scouting and pre-evaluating DTx targets with our expert eye saves our clients valuable time in the selection process. We introduce our clients to founding teams, conduct first interviews, and make sure that the target is up to the mark.

Moreover, we are independent and act on your behalf. Like an architect for your dream house. We will find the best “plumber” and “roofer” which fit your requirements – not targets which happen to be in our start-up portfolio.

Voice of Customer Analysis

Our clients have big plans with their target. We verify the existing product-market fit and help understand the target’s full potential.

By nature, an acquisition target will always claim a perfect product-market. Independent and direct feedback from the point-of-care provides a realistic understanding of relevant needs and requirements of the stakeholders that later decide over the success of the product or service.

With our support, our clients can clearly specify what they expect their digital health solution provider to bring to the table – objectively and independently.