Medical Device Daily National Editor
What’s the outlook for med-tech in 2008? Well, according to the industry consultants and other speakers who participated in an MX magazine webcast on the topic earlier this week, it’s:
• Good for neurotechnology.
• Changing for cardiovascular.
• Surging for in vitro diagnostics.
• Booming for orthopedics.
• Changing for imaging.
• A time of steady growth for X-ray and ultrasound.
• And connectivity is making its mark.
Although the webcast at times reflected the hectic pace of trying to touch on seven distinct segments of the industry in an hour’s time (and not succeeding), the speakers nonetheless offered worthwhile bullet points concerning what they see happening in their respective sectors as this year plays out.
Casey Crawford Lynch, managing director of Neuroinsights, which bills itself as “the Neurotech Market Authority,” was first out of the blocks with a look at the neurotechnology sector.
She said that while “many think this is a ‘niche’ industry,” it in fact covers many – and huge – markets. And with a slide citing a dozen or more markets such as addiction, anxiety and obesity, Lynch declared: “These are all massive markets.”
She cited the neuroprosthetics portion of the sector, saying it generated some $4.5 billion in revenues in 2006.
That included $2.5 billion in neurosurgery, which Lynch termed “the fastest-growing sector in neurovascular intervention.” Another $1.38 billion came from neurostimulation, with spinal-cord stimulation, vagus nerve stimulation and peripheral nerve stimulation as the largest sub-sectors.
Another $540 million was recorded from implants, particularly cochlear implants, with retinal implants representing the next wave of neuro implants.
The neurotech sector has multiple drivers, Lynch said, including improving technologies, faster regulatory processes, availability of financing for start-ups, and broadening patient interest in such treatments.
Venkat Rajan, industry analyst for medical devices at the global consulting firm Frost & Sullivan, gave a fast-paced look at the sprawling cardiovascular sector, his lead slide headlined: “hubris and self-inflicted wounds [have led] to a market slump.”
He said that both the implantable cardioverter-defibrillator and drug-eluting stent markets have declined in 2006-2007, with both Boston Scientific and Johnson & Johnson/Cordis being significantly impacted by the falloff, as well as by emerging competition from Medtronic, Abbott and others.
Key market trends important to cardio product companies, Rajan said, include:
• Saving lives is not enough. “Patients want their lives back, so quality-of-life products are important.”
• Is your product a luxury, accessory or necessity? “You have to understand what category your product fits into.”
He said the next hot market clearly is atrial fibrillation (AF), with large and growing patient populations both in the U.S. and worldwide, with less than 20% of that addressable market being served.
Shara Rosen, senior analyst with Kalorama Information, reviewed the in vitro diagnostics sector, declaring that “as 2008 begins, IVDs are looking better than ever.”
Citing “the emerging era of personalized medicine,” she said pharmas are being slammed by the high cost of drug development and numerous Phase II trial failures of therapeutics.
“Regulatory agencies are looking to biomarker tools,” Rosen said, “so IVD and pharma companies are collaborating to bring a new focus to care.”
The big winner in all this? “Patients!”
She predicted a continuation of the consolidation trend in the diagnostics sector, plus more capital investment.
Anthony Viscogliosi, founder, CEO and chairman of Small Bone Innovations and a partner in Viscogliosi Bros., an orthopedics VC firm, discussed continuing innovation in the musculoskeletal sector, which he described as “the largest sector in healthcare.”
He put this sector at $34 billion worldwide in 2007 and predicted a leap to more than $100 billion over the next 15 years.
Citing the attractiveness of medical devices as an investment, Viscogliosi cited “macro market drivers,” such as: “The human body ... not built to last as long as we are living,” and people “working longer and remaining active longer.”
He noted a “very significant” flow of investment dollars into the sector, with start-up firms “stimulating capital activity,” and companies in the sector as growing through “the consolidation of promising technologies.”
“Healthcare has passed information technology and is gaining on biopharma as a magnet for funding,” Viscogliosi said, buoyed by patients are “seeking to mitigate their problem, not simply medicate their pain away.”
Beverly Schierer, VP research and analysis at MD Buyline, tackled the topic “What’s Next for Top-End Imaging Modalities?” Facing arguably the most difficult task of summarizing what’s happening in several large and evolving sub-sectors, she took a decidedly bullet-point approach:
• Computed radiography is growing in the mammography sector, driven by the fact that it costs 50% less than digital solutions.
• PET-CT growth factors include prevention of heart disease and cancer, aging baby boomers, and larger roles by niche players.
• SPECT-CT is highlighted by niche players in the market with dedicated systems, cardiology applications and scinitimammography.
• The MRI sector is marked by the move from 1.5 Tesla to 3.0 Tesla systems, emerging applications and technologies, and consolidation that is resulting in hybrid PET/MRI systems.
• As for CT, Schierer said that sector is marked by development of increased slice levels, “nano-panel” detection, improvements in core beam algorithms, “virtual” CT simulators and growing intra-operative and portable markets.
She was followed by Diane Wilkinson, an analyst with the InMedica division of IMS Research, who offered a look at the future of X-ray and ultrasound (U/S). She said the X-ray sector is showing 5% to 6% annual growth, while the ultrasound segment is running at a growth rate of 6% to 7% annually.
Compact U/S systems drive that market, Wilkinson said, with growth of about 22% a year.
Tim Gee, principal of Medical Connectivity Consulting, discussed progress in device connectivity, citing “connectivity as [corporate] strategy,” with companies repositioning themselves to add value and differentiate from competitors, often then selling to larger acquirers.
He also noted the acquisition strategy of companies such as Philips Medical Systems and GE Healthcare, of moving monitoring from being a “box business” to one built on the provision of ongoing service.
Buyers of systems “now expect connectivity to improve their workflow,” Gee said, citing the growing importance of standards-based connectivity, and that “most every other sector has greater reliance on standards than does healthcare.”
The webcast was moderated by MX’s editor-in-chief, Steve Halasey.