Armistice Capital Among Key Investors in Growing Women’s Health Sector

While companies developing technology-enabled women’s health products — sometimes referred to as the femtech market — received only 2% of the $41.2 billion in venture funding that was given to health care innovators in 2023, research suggests investor interest in the sector may be on the rise.

A recent report by the McKinsey Health Institute reveals that women spend approximately 25% more of their lives in poor health compared to men. Closing this health gap has the potential to add $1 trillion annually to the global economy by 2040.

Venture funding for the overall health tech market declined 27% between 2022 and 2023. Investments in companies that focus on women’s health, however, increased by 5%, reaching $481 million according to Deloitte. In the first half of 2024, U.S.-based venture capital-backed women’s health companies secured nearly $680 million — a nearly 3% increase over the previous midyear record.

The sector has experienced considerable growth in recent years, with more than 60% of the current roster of women’s health startup companies founded between 2018 and 2022.

Financing Gynecological Health Solutions

In November of this year, Business Mole also reported the femtech market had grown in the past several years — expanding from primarily focusing on pregnancy and fertility to addressing issues relating to menopause, pelvic health and mental health.

The business news publication mentioned more than $1 billion was invested in the sector in 2022 by entities such as global value-oriented and event-driven hedge fund Armistice Capital, venture capital firm Alumni Ventures, and Y Combinator, a tech startup accelerator.

Armistice Capital joins other institutional investors like Vanguard Group adding women’s health companies to their portfolios. Armistice Capital, for example, is Aspira Women’s Health Inc.’s top investor, holding nearly a 5% stake in the company. According to Fintel, Armistice disclosed ownership of 1,157,000 shares of the company that were valued at $3,586,700, as of March 31, 2024.

Aspira Women’s Health has established noninvasive, AI-powered tests to aid in the diagnosis of gynecologic diseases. Its OvaWatch resource was designed to help assess the risk of ovarian cancer for women with adnexal masses that have been considered indeterminate or benign by initial clinical assessment. Ova1Plus combines two FDA-cleared tests and is applicable for women with pelvic masses who have surgery planned.

Aspira is also working on a noninvasive test that could assist with the identification of endometriosis — a disease in which tissue that is similar to the uterus’ lining grows outside of the uterus.

Artificial intelligence applications for women’s health have attracted significant investment broadly. These tools aim to detect conditions like PCOS and endometriosis earlier, and address conditions historically underdiagnosed in women, such as ADHD and autism.

An Interest in Advancing Treatment Options

Hedge funds and institutional investors have also backed other companies that are engaging in tech-supported women’s health endeavors — including biotech research that leads to the creation of medical solutions.

In 2023, late-stage biopharmaceutical company Spruce Biosciences announced it had entered into a definitive securities purchase agreement for a private placement that was expected to result in gross proceeds of approximately $53.6 million — which included participation from investors such as venture capital firms HealthCap and RiverVest Venture Partners, life science investment firm Abingworth, investment firm Rock Springs Capital, Armistice Capital, and investment firm 5am Ventures.

Beyond these core technologies, investment is concentrating in several high-potential market segments. IO Biotech, which received financing from Armistice Capital, Vivo Capital, and Pivotal Life Sciences, is currently working on a vaccine candidate to combat difficult-to-treat breast, colorectal, pancreatic, prostate, and ovarian cancers.

The menopause management sector is also gaining traction, driven by a growing focus on treatment innovations for the more than 1 million U.S. women who experience menopause annually, according to the National Institutes of Health. Institutional investors are taking note, with Armistice Capital recently increasing its stake in Mithra Pharmaceuticals, a company developing Donesta, a next-generation hormone therapy for menopause relief. In August 2023, Armistice participated in a $21.5 million private placement, bringing its ownership stake in Mithra to 14.58%.

Bone Biologics, another company conducting women’s health-related research, has also received support from institutional and other investors, including trading and technology company Tower Research Capital LLC, investment management firm McMahon Financial Advisors, LLC, and Armistice Capital — which in its May 15, 2024 13F-HR form filing said it had added 37,000 shares of Bone Biologics Corporation stock to its portfolio.

Bone Biologics’ initial development efforts have been focused on spinal fusion; however, the company believes the medical technology it has been developing to enhance bone regeneration and repair could also have osteoporosis-related applications. Osteoporosis — which occurs when the creation of new bone does not match the pace of bone loss — can be a particular concern for women. The condition causes twice as many women (50%) as men (25%) who are age 50 or older to break a bone.

Digital mental health services tailored to women’s needs represent another growth area. Investment in these platforms has risen as awareness increases about gender-specific aspects of mental health, offering support for conditions ranging from postpartum depression to hormone-related mood changes.

“Ensuring women have access to high quality, affordable women’s centered care actually creates a more stable economy and society,” said Jen Radin, a member of Deloitte’s health care advisory. “So the business case for women’s health is really very clear.”