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in thousands of blogs and other written forums and converts this unstructured content into structured information to support better-informed decision making by patients, providers, and pharmaceutical marketing teams.

• Investment Theme - Patient Engagement / Shift to Low-Cost Setting: As incentives move away from procedural volume and towards cost-effective quality and outcomes, providers and care delivery organizations are seeking ways to deliver care outside of the hospital or physicians’ office through technologies that may allow remote monitoring, and empowers other healthcare professionals, or even patients to play a greater role in patient care and well-being. Audax Health (NLV-II; exited at 3.4x) touches on this theme with its Zensey product, which engages patients in their own health through programs endorsed by their payer.

Problem Area: Inflated Pricing & Fraud

• Investment Theme - Price & Cost Transparency, Financial Error Reduction: Error reduction can generate significant cost savings at the enterprise level. Truveris (NLV-II) allows self-insured employers to verify the accuracy of all pharmaceutical benefit claims from their pharmacy benefit managers in real time, thus resulting in more accurate payments and significant cost savings.

These are just some of the illustrative themes for I.C. investments in NLV-III. This is an emerging area with strong growth drivers, and the Fund Managers expect the opportunity set to evolve and broaden substantially over NLV-III’s investment cycle.

An intriguing aspect of this sector is the possibility for significantly shortened development timelines and product iteration cycles. Particularly because they are usually outside the jurisdiction of the FDA and standard reimbursement paths, companies in the I.C. sector can develop and launch products in months not years, and for single digit millions rather than several tens of millions of dollars. Product development for these types of applications leverages “off-the-shelf technologies” in sensors, communications, software and web design/deployment that were invented and validated in non-healthcare market segments. These products can be quickly and cheaply tested, iterated and refined in the marketplace with customers while generating early revenue, which provides a greater degree of flexibility to evolve the right solution through a series of incremental improvements rather than a single track, expensive and prolonged development effort.

The Fund’s I.C. investments will be predominantly in private companies in the U.S, at or near commercialization. Similar to the biopharmaceutical strategy, New Leaf’s objective in its I.C. investments is to build ownership positions that are large enough to allow the Fund Managers to exert influence on the company, and to actively manage the investments through board participation. In certain circumstances, NLV may initially take smaller positions with plans to significantly increase the Fund’s investment as the companies make progress through key early technical or commercial hurdles. Utilizing this strategy, the Fund Managers expect to build larger positions around select investments as they are progressively de-risked, and may not continue to support investments that do not demonstrate appropriate progress.

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