Investment in medtech and biotech: Outlook

Medtech and biotech investment is driven by an expectation of returns, but rapid advances in technology simultaneously drive excitement for their application while increasing the uncertainty in what is needed to bring those applications in the market.

MedMarket Diligence has tracked technology developments and trends in advanced medical technologies, inclusive of medical devices and the range of other technologies — in biotech, pharma, others — that impact, drive, limit, or otherwise affect markets for the management of disease and trauma. This broader perspective on new developments and a deeper understanding of their limitations is important for a couple of reasons:

  1. Healthcare systems and payers are demanding competitive cost and outcomes for specific patient populations, irrespective of technology type — it’s the endpoint that matters. This forces medical devices into de facto competition with biotech, pharma, and others.
  2. Medical devices are becoming increasingly intelligent medical devices, combining “smart” components, human-device interfaces, integration of AI in product development and products.
  3. Medical devices are rarely just “medical devices” anymore, often integrating embedded drugs, bioresorable materials, cell therapy components, etc.
  4. Many new technologies have dramatically pushed the boundaries on what medicine can potentially accomplish, from the personalized medicine enabled by genomics, these advances have served to create bigger gaps between scientific advance and commercial reality, demanding deeper understanding of the science.

The rapid pace of technology development across all these sectors and the increasing complexity of the underlying science are factors complicating the development, regulatory approval, and market introduction of advanced technologies. The unexpected size and number of the hurdles to bring these complex technologies to the market have been responsible for investment failures, such as:

  • Theranos. Investors were too ready to believe the disruptive ideas of its founder, Elizabeth Holmes. When it became clear that data did not support the technology, the value of the company plummeted.
  • Juno Therapeutics. The Seattle-based gene therapy company lost substantial share value after three patients died on a clinical trial for the company’s cell therapy treatments that were just months away from receiving regulatory approval in the US.
  • A ZS Associates study in 2016 showed that 81% of medtech companies struggle to receive an adequate return on investment

As a result, investment in biotech took a correctional hit in 2016 to deflate overblown expectations. Medtech, for its part, has seen declining investment, especially at early stages, reflecting an aversion to uncertainty in commercialization.

Below are clinical and technology areas that we see demonstrating growth and investment opportunity, but still represent challenges for executives to navigate their remaining development and commercialization obstacles:

  • Cell therapies
    • Parkinson’s disease
    • Type I diabetes
    • Arthritis
    • Burn victims
    • Cardiovascular diseases
  • Diabetes
    • Artificial pancreas
    • Non-invasive blood glucose measurement
  • Tissue engineering and regeneration
    • 3D printed organs
  • Brain-computer and other nervous system interfaces
    • Nerve-responsive prosthetics
    • Interfaces for patients with locked-in syndrome to communicate
    • Interfaces to enable (e.g., Stentrode) paralyzed patients to control devices
  • Robotics
    • Robotics in surgery (advancing, despite costs)
    • Robotic nurses
  • Optogenetics: light modulated nerve cells and neural circuits
  • Gene therapy
    • CRISPR
  • Localized drug delivery
  • Immuno-oncology
    • Further accelerated by genomics and computational approaches
    • Immune modulators, vaccines, adoptive cell therapies (e.g., CAR-T)
  • Drug development
    • Computational approaches to accelerate the evaluation of drug candidates
    • Organ-on-a-chip technologies to decrease the cost of drug testing

Impact on investment

  • Seed stage and Series A investment in med tech is down, reflecting an aversion to early stage uncertainty.
  • Acquisitions of early stage companies, by contrast, are up, reflecting acquiring companies to gain more control over the uncertainty
  • Need for critical insight and data to ensure patient outcomes at best costs
  • Costs of development, combined with uncertainty, demand that if the idea’s upside potential is only $10 million, then it’s time to find another idea
  • While better analysis of the hurdles to commercialization of advanced innovations will support investment, many medtech and biotech companies may opt instead for growth of established technologies into emerging markets, where the uncertainty is not science-based

 

Below is illustrated the fundings by category in 2015 and 2016, which showed a consistent drop from 2015 to 2016, driven by a widely acknowledged correction in biotech investment in 2016.

*For the sake of comparing other segments, the wound fundings above exclude the $1.8 billion IPO of Convatec in 2016.

Source: Compiled by MedMarket Diligence, LLC.

 

Forgotten Opportunities: Early Stage Biotech and Medtech Investment

Due to the uncertainty in the development, clinical testing, and regulatory approval of both biotech and medical technologies, which increasingly have to be viewed with the same competitive lens, investors have over the past few years shied away from seed stage or Series A stage company investment in favor of those nearer to market introduction. However, with the advent of a great number of new technologies and advances in the underlying science, there is enormous opportunity to identify companies and emerging sectors arising from these advances. The problem in identifying realistically promising companies is that it must be done so without falling prey to the bad investment practices in the past that ensued from a poor understanding of the technologies and their remaining commercial hurdles. Without careful consideration of remaining scientific development needed, the product’s target market, its competitors, and the sum total of the company’s capabilities to commercialize these technologies, investment in these areas will fall short of investment objectives or fail them outright.

While any of these considerations have the capacity to preempt a successful market introduction, a failure to understand the science behind the product and its remaining development hurdles to commercialization is likely to be the biggest cause of failure.

“We’ve already had one glaring example of a company, and its investors, learning the hard way that health and science advisors are important: Theranos.” (link)

Venture Capital has backed away from early stage investment

Earlier stage investment, with its higher risk, has higher potential reward, so there is a big need for more effective evaluation of potential early stage investments in order to (1) seize these opportunities that will otherwise potentially be lost with the shift to later stage fundings, (2) sort out those companies/technologies with overwhelming commercialization hurdles from those that will profitably tap an opportunity, and (3) gain the value of these opportunities before the innovation appreciates in value, driving up the price of the investment.

The Biotech Bubble

Biotech in the 1980s was enamored with companies pursuing “magic bullets” — technologies that had the potential to cure cancer or heart disease or other conditions with large, untapped or under-treated populations. With few exceptions, these all-in-one-basket efforts were only able achieve a measure of humility in the VCs who had poured volumes of money into them.

Here was evidenced a fundamental problem with biotech at a time when true scientific milestones were being reached, including successes in mapping the human genome: Landmark scientific milestones do not equate with commercial success.

As a result, money fled from biotech as few products could make it to market due to persistent development and FDA hurdles. By the late 1980s, many biotechs saw three quarters of their value disappear.

A Renewed Bubble?

The status of biomedical science and technology, with multiple synergistic developments, will lead to wild speculation and investment, potentially leading to yet another investment bubble. However, there will be advances that can point to real timelines for market introduction that will support investment.

Recent advances, developments and trends supporting emerging therapeutics

  1. Stem cells. A double-edged sword in that these do represent some the biggest therapeutics that will emerge, yet caution is advised since the mechanisms to control stem cells are not always sufficient to prevent their nasty tendency to become carcinogenic.
  2. Drug discovery models, such as using human “organoids” and other cell-based models to test or screen new drugs.
  3. Systems to accelerate the rapid evaluation of hundreds, perhaps, thousands of potential drugs before moving to animal models or preclinicals.
    1. Machine-learning algorithms
    2. Cell/tissue/organ models
    3. Meta-analysis, the practice of analyzing multiple, independently produced clinical data to draw conclusions from the broader dataset.
  4. Cross-discipline science
    1. cell biologists, immunologists, molecular biologists and others have a better understanding of pathology and therapeutics as a result of information sharing; plus BIG DATA (e.g., as part of the “Cancer Moonshot”). Thought leaders have called for collection and harnessing of patient data on a large scale and centralized for use in evaluating treatments for specific patients and cancer types.
    2. Artificial intelligence applied to diagnosis and prescribed therapeutics (e.g., IBM Watson).
    3. Examples of resulting therapies, at a minimum, include multimodal treatment – e.g., radiotherapy and immunotherapy – but more often may be represented in considerably more backend research and testing to identify and develop products with greater specificity, greater efficacy, and lowered risk of complications.
  5. Materials science developments, selected examples:
    1. Scaffolds in tissue engineering
    2. Microgels
    3. Graphene
    4. Polyhedral boranes
    5. Nanometric imprinting on fiber
    6. Knitted muscles to provide power link
    7. 3-D printed skin and more complex organs to come
    8. Orthopedic scaffolds made from electrospun nanofibers
  6. CAR-T (chimeric antigen receptor T cell therapy)
  7. CRISPR/Cas-9. Gene editing
    1. Removal, insertion of individual genes responsible for disease
    2. Potential use for creating chimeras of human and other (e.g., pig) species in order to, for example, use pigs for growing human organs for transplant.
  8. Smart devices: smart biopsy needles, surgical probes to detect cancer margins, artificial pancreas. Devices using information

 

We sum this up with these prerequisites for investment:

Prerequisites for Early Stage Med/Bio Investment

  1. A fully understood and managed gap between scientific advance and commercial reality.
    1. Investment must be tied to specific steps (prototyping, preclinicals, clinicals, physician training, etc.).
  2. A management team qualified in commercializing medtech or biotech products.
    1. CEOs (and/or Chief Medical Officers, Chief Scientific Officers) with medical science backgrounds (MD, PhD) favored over CPAs or even JDs.
  3. Reimbursement strategy pursued as something more than an afterthought
  4. Technology development in sync with end-user acceptance and training to leverage the benefits:
    1. Easier to use
    2. Fewer complications
    3. Attractive physician revenue streams
  5. Broad competitive advantage pursued:
    1. Product benefits must stand up against all competition, irrespective of technology type (devices competing with drugs, biotech).
    2. Benefits of reducing the cost of care for an existing patient population are paramount.
    3. Competitive advantage must consider the trend in technology development to avoid being disrupted by other products soon to reach the market.
  6. Predefined exit strategy; selected examples:
    1. Positioning to add innovation to a mid-cap or large-cap medtech or biotech as acquirers.
    2. Development of platform technologies for licensing or sale.
    3. IPO

 

Future investments are likely to track the historical focus on specific diseases and conditions:

Source: MedMarket Diligence, LLC and Emerging Therapeutic Company Investment and Deal Trends; Biotechnology Innovation Organization.


MedMarket Diligence, mediligence.com, tracks medical and biotechnology development to provide meaningful insights for manufacturers, investors, and other stakeholders.

The best medtech investment opportunities

In reviewing patents, fundings, technology development trends, market development, and other hard data sources, we feel these are some of the strongest areas for investment in not only the medical device side of medtech, but also the broader biomedical technology arena:

  • Materials technologies
    • graphene
    • bioresorbables
    • biosensors
    • polymers
    • bioadhesives
  • Cell therapy and tissue engineering
    • cell-based treatments (diabetes, spinal cord injury, traumatic brain injury)
    • extracellular matrices in soft tissue repair and regeneration
  • Nanotechnology (subject of forthcoming report)
    • nano coatings
    • nano- and micromedical technologies for localized drug delivery
    • nanoparticles
  • 3D printing
    • prototype development
    • patient-specific implants
  • Minimally- and non-invasive technologies
    • transcatheter alternatives to surgery
    • NOTES (natural orifice transluminal endoscopic surgery)
  • Diabetes non-invasive glucose testing
  • Intraoperative surgical guidance
    • Cancer probes (e.g., fluorescent or optical coherence tomography, frozen section, cytologic imprint analysis, ultrasound, micro-computed tomography, near-infrared imaging, and spectroscopy)
  • neurostimulation and neuromodulation
  • point-of-care diagnostics
  • point-of-care imaging
  • AI-enhanced devices

In addition, there are many areas in healthcare in which there is much untapped demand with problems that, so far, seem to have eluded medtech solutions. These include infection control (Zika, MRSA, TB, nosocomial infections, etc.), chronic wound treatment (including decubitus/stasis/diabetic ulcers), type 2 diabetes and obesity.

 

Coronary revascularization options evolve

The number of options that are in use or development for coronary revascularization is extraordinary. Given the mortality associated with coronary artery disease, it is unsurprising that it has been the focus of so much development.

Below gives the “branches” of approaches treatment of coronary artery disease. This may well be incomplete, give the rapid pace of development.

Coronary Revascularization Treatment Options

Source: MedMarket Diligence, LLC

See also “Global Dynamics of Surgical and Interventional Cardiovascular Procedures, 2015-2022”, report #C500. Order online.

10 Facts About Medical Technologies that will Impress Your Friends

  1. In catheterization, a doctor can poke a hole in your leg and fix your heart.
  2. Radiosurgery can destroy a tumor and leave adjacent tissue untouched, touching the body only with energy.
  3. A doctor thousands of miles away can do surgery on you via telepresence and robotic instrumentation.
  4. Medical device implants like stents have been developed to simply dissolve over time.
  5. Doctors can see cancer via live imaging during operations to ensure that they excise it all.
  6. Type 1 diabetics may soon be able to so easily manage their condition, via combined insulin pump / glucometer that they may almost forget they have diabetes (or cell therapy may cure them!), while Type 2 diabetics will grow in number and cost to manage.
  7. Organs are already being printed, as are other tissue implants.
  8. Neuroprosthetics, exoskeletons and related technologies are enabling wheelchair-bound and other physically challenged people to walk upright, allowing amputees to control prosthetics with their mind,
  9. Almost two-thirds of the 7,000 medical device firms in the United States have fewer than 20 employees — Medtronic employs all the rest. (OK, that’s an exaggeration.)
  10. Science fiction continues to drive the imagination of medtech innovators. Decentralized diagnostics — very small, efficient devices in the hands of a doctor that will rapidly assist in diagnoses and expedite the process of intervention — are becoming pervasive, ideally embodied in the fictional “tricorder” in Star Trek.

List of high growth medtech products

Below is a table with a list of the market segments demonstrating greater than 10% compound annual growth rate for the associated region through 2022, drawn from our reports on tissue engineering & cell therapy, wound management, ablation technologies, stroke, peripheral stents, and sealants/glues/hemostats. Products with over 10% CAGR in sales are shown in descending order of CAGR.

RankProductTopicRegion
1General, gastrointestinal, ob/gyn, othertissue/cellWW
2Ophthalmologytissue/cellWW
3Organ Replacement/ Repairtissue/cellWW
4Urologicaltissue/cellWW
5Neurologicaltissue/cellWW
6Autoimmune Diseasestissue/cellWW
7CV/ Vasculartissue/cellWW
8Bioengineered skin and skin substituteswoundRest of A/P
9Peripheral drug-eluting stents (A/P)peripheral interventionalA/P
10Peripheral drug eluting stentsperipheral interventionalRoW
11Peripheral drug-eluting stents (US)peripheral interventionalUS
12Negative pressure wound therapywoundGermany
13Hydrocolloid dressingswoundRest of A/P
14Cancertissue/cellWW
15Foam dressingswoundRest of A/P
16Growth factorswoundRest of A/P
17Alginate dressingswoundRest of A/P
18Dentaltissue/cellWW
19Bioengineered skin and skin substituteswoundJapan
20Hemostatssealants, glues, hemostatsA/P
21Skin/ Integumentarytissue/cellWW
22Bioengineered skin and skin substitutessealants, glues, hemostatsUS
23Bioengineered skin and skin substitutessealants, glues, hemostatsWW
24Film dressingswoundRest of A/P
25Surgical sealantssealants, glues, hemostatsA/P
26Hydrogel dressingswoundRest of A/P
27TAA Stent graftsperipheral interventionalA/P
28Negative pressure wound therapywoundRoW
29Biological gluessealants, glues, hemostatsA/P
30FoamwoundRoW
31HydrocolloidwoundGermany
32AAA Stent graftsperipheral interventionalA/P
33Cerebral thrombectomy systemsstrokeA/P
34High-strength medical gluessealants, glues, hemostatsA/P
35Carotid artery stenting systemsstrokeA/P
36Cardiac RF ablation productsablationA/P
37Alginate dressingswoundGermany
38Peripheral venous stentsperipheral interventionalA/P
39Cerebral thrombectomy systemsstrokeUS
40Left atrial appendage closure systemsstrokeA/P
41Cyanoacrylate gluessealants, glues, hemostatsA/P
42Foam dressingswoundRest of EU
43Foam dressingswoundKorea
44Cryoablation cardiac & vascular productsablationA/P
45Bioengineered skin and skin substituteswoundGermany
46Thrombin, collagen & gelatin-based sealantssealants, glues, hemostatsA/P
47Cardiac RF ablation productsablationRoW
48Bioengineered skin and skin substituteswoundRoW
49Microwave oncologic ablation productsablationA/P

Note source links: Tissue/Cell, Wound, Sealants/Glues/Hemostats, Peripheral Stents, Stroke, Ablation.

Source: MedMarket Diligence Reports

Where will medicine be in 2035?

An important determinant of “where medicine will be” in 2035 is the set of dynamics and forces behind healthcare delivery systems, including primarily the payment method, especially regarding reimbursement. It is clear that some form of reform in healthcare will result in a consolidation of the infrastructure paying for and managing patient populations. The infrastructure is bloated and expensive, unnecessarily adding to costs that neither the federal government nor individuals can sustain. This is not to say that I predict movement to a single payer system — that is just one perceived solution to the problem. There are far too many costs in healthcare that offer no benefits in terms of quality; indeed, such costs are a true impediment to quality. Funds that go to infrastructure (insurance companies and other intermediaries) and the demands they put on healthcare delivery work directly against quality of care. So, in the U.S., whether Obamacare persists (most likely) or is replaced with a single payer system, state administered healthcare (exchanges) or some other as-yet-unidentified form, there will be change in how healthcare is delivered from a cost/management perspective. 

From the clinical practice and technology side, there will be enormous changes to healthcare. Here are examples of what I see from tracking trends in clinical practice and medical technology development:

  • Cancer 5 year survival rates will, for many cancers, be well over 90%. Cancer will largely be transformed in most cases to chronic disease that can be effectively managed by surgery, immunology, chemotherapy and other interventions. Cancer and genomics, in particular, has been a lucrative study (see The Cancer Genome Atlas). Immunotherapy developments are also expected to be part of many oncology solutions. Cancer has been a tenacious foe, and remains one we will be fighting for a long time, but the fight will have changed from virtually incapacitating the patient to following protocols that keep cancer in check, if not cure/prevent it. 
  • Diabetes Type 1 (juvenile onset) will be managed in most patients by an “artificial pancreas”, a closed loop glucometer and insulin pump that will self-regulate blood glucose levels. OR, stem cell or other cell therapies may well achieve success in restoring normal insulin production and glucose metabolism in Type 1 patients. The odds are better that a practical, affordable artificial pancreas will developed than stem or other cell therapy, but both technologies are moving aggressively and will gain dramatic successes within 20 years.

Developments in the field of the “artificial pancreas” have recently gathered considerable pace, such that, by 2035, type 1 blood glucose management may be no more onerous than a house thermostat due to the sophistication and ease-of-use made possible with the closed loop, biofeedback capabilities of the integrated glucometer, insulin pump and the algorithms that drive it, but that will not be the end of the development of better options for type 1 diabetics. Cell therapy for type 1 diabetes, which may be readily achieved by one or more of a wide variety of cellular approaches and product forms (including cell/device hybrids) may well have progressed by 2035 to become another viable alternative for type 1 diabetics.

  • Diabetes Type 2 (adult onset) will be a significant problem governed by different dynamics than Type 1. A large body of evidence will exist that shows dramatically reduced incidence of Type 2 associated with obesity management (gastric bypass, satiety drugs, etc.) that will mitigate the growing prevalence of Type 2, but research into pharmacologic or other therapies may at best achieve only modest advances. The problem will reside in the complexity of different Type 2 manifestation, the late onset of the condition in patients who are resistant to the necessary changes in lifestyle and the global epidemic that will challenge dissemination of new technologies and clinical practices to third world populations.

Despite increasing levels of attention being raised to the burden of type 2 worldwide, including all its sequellae (vascular, retinal, kidney and other diseases), the pace of growth globally in type 2 is still such that it will represent a problem and target for pharma, biotech, medical device, and other disciplines.

  • Cell therapy and tissue engineering will offer an enormous number of solutions for conditions currently treated inadequately, if at all. Below is an illustration of the range of applications currently available or in development, a list that will expand (along with successes in each) over the next 20 years.

    Cell therapy will have deeply penetrated virtually every medical specialty by 2035. Most advanced will be those that target less complex tissues: bone, muscle, skin, and select internal organ tissues (e.g., bioengineered bladder, others). However, development will have also followed the money. Currently, development and use of conventional technologies in areas like cardiology, vascular, and neurology entails high expenditure that creates enormous investment incentive that will drive steady development of cell therapy and tissue engineering over the next 20 years, with the goal of better, long-term and/or less costly solutions.
  • Gene therapy will be an option for a majority of genetically-based diseases (especially inherited diseases) and will offer clinical options for non-inherited conditions. Advances in the analysis of inheritance and expression of genes will also enable advanced interventions to either ameliorate or actually preempt the onset of genetic disease.

    As the human genome is the engineering plans for the human body, it is a potential mother lode for the future of medicine, but it remains a complex set of plans to elucidate and exploit for the development of therapies. While genetically-based diseases may readily be addressed by gene therapies in 2035, the host of other diseases that do not have obvious genetic components will resist giving up easy gene therapy solutions. Then again, within 20 years a number of reasonable advances in understanding and intervention could open the gate to widespread “gene therapy” (in some sense) for a breadth of diseases and conditions –> Case in point, the recent emergence of the gene-editing technology, CRISPR, has set the stage for practical applications to correct genetically-based conditions.
  • Drug development will be dramatically more sophisticated, reducing the development time and cost while resulting in drugs that are far more clinically effective (and less prone to side effects). This arises from drug candidates being evaluated via distributed processing systems (or quantum computer systems) that can predict efficacy and side effect without need of expensive and exhaustive animal or human testing.The development of effective drugs will have been accelerated by both modeling systems and increases in our understanding of disease and trauma, including pharmacogenomics to predict drug response. It may not as readily follow that the costs will be reduced, something that may only happen as a result of policy decisions.
  • Most surgical procedures will achieve the ability to be virtually non-invasive. Natural orifice transluminal endoscopic surgery (NOTES) will enable highly sophisticated surgery without ever making an abdominal or other (external) incision. Technologies like “gamma knife” and similar will have the ability to destroy tumors or ablate pathological tissue via completely external, energy-based systems.

    By 2035, technologies such as these will measurably reduce inpatient stays, on a per capita basis, since a significant reason for overnight stays is the trauma requiring recovery, and eliminating trauma is a major goal and advantage of minimally invasive technologies (e.g., especially the NOTES technology platform). A wide range of other technologies (e.g., gamma knife, minimally invasive surgery/intervention, etc.) across multiple categories (device, biotech, pharma) will also have emerged and succeeded in the market by producing therapeutic benefit while minimizing or eliminating collateral damage.

Information technology will radically improve patient management. Very sophisticated electronic patient records will dramatically improve patient care via reduction of contraindications, predictive systems to proactively manage disease and disease risk, and greatly improve the decision-making of physicians tasked with diagnosing and treating patients.There are few technical hurdles to the advancement of information technology in medicine, but even in 2035, infotech is very likely to still be facing real hurdles in its use as a result of the reluctance in healthcare to give up legacy systems and the inertia against change, despite the benefits.

  • Personalized medicine. Perfect matches between a condition and its treatment are the goal of personalized medicine, since patient-to-patient variation can reduce the efficacy of off-the-shelf treatment. The thinking behind gender-specific joint replacement has led to custom-printed 3D implants. The use of personalized medicine will also be manifested by testing to reveal potential emerging diseases or conditions, whose symptoms may be ameliorated or prevented by intervention before onset.
  • Systems biology will underlie the biology of most future medical advances in the next 20 years. Systems biology is a discipline focused on an integrated understanding of cell biology, physiology, genetics, chemistry, and a wide range of other individual medical and scientific disciplines. It represents an implicit recognition of an organism as an embodiment of multiple, interdependent organ systems and its processes, such that both pathology and wellness are understood from the perspective of the sum total of both the problem and the impact of possible solutions.This orientation will be intrinsic to the development of medical technologies, and will increasingly be represented by clinical trials that throw a much wider and longer-term net around relevant data, staff expertise encompassing more medical/scientific disciplines, and unforeseen solutions that present themselves as a result of this approach.Other technologies being developed aggressively now will have an impact over the next twenty years, including medical/surgical robots (or even biobots), neurotechnologies to diagnose, monitor, and treat a wide range of conditions (e.g., spinal cord injury, Alzheimer’s, Parkinson’s etc.).

The breadth and depth of advances in medicine over the next 20 years will be extraordinary, since many doors have been recently opened as a result of advances in genetics, cell biology, materials science, systems biology and others — with the collective advances further stimulating both learning and new product development. 


See the 2016 report #290, “Worldwide Markets for Medical and Surgical Sealants, Glues, and Hemostats, 2015-2022.”

Where is the medtech growth?

Medical technology is, for many of its markets, being forced to look for growth from more sources, including emerging markets. Manufacturers are able to gain better margins through innovation, but their success varies by clinical application.

Cardiology. A demanding patient base (it’s life or death). Be that as it may, there are few new or untapped markets, only the opportunity for new technologies to displace existing markets. Interventional technologies are progressively enabling treatment of larger patient populations, but much growth will still be from emerging markets.

Wound management. Even the most well-established markets will see growth from innovation. The wound market just needs less growth to be happy, since small percentage growth becomes very large by volume. And yet, some of the most significant growth in the long run will be for more advanced

Surgery. Every aspect of surgery seems to be subject to attempts to improve upon it. Robotics, endoscopy, transcatheter, single-port, incisionless, natural orifice. Interventional options are increasing the treatable patient population, and it seems likely that continued development (e.g., materials, including biodegradables, use of drug or other coatings, including cells) will yield more routine procedures for more and different types of conditions, many of which have been inadequately served, if it all.

Orthopedics. Aging populations demanding more agility and mobility will drive orthopedic procedures and device use. Innovation still represents some upside, but more from 3D printing than other new technologies being introduced to practice.

Tissue/Cell Therapy. This is a technology opportunity (and represents radical innovation for most clinical areas), but it is also a set of target clinical applications, since tissues/cells are being engineered to address tissue or cell trauma or disease. Growth is displacing existing markets with new technology, such as bioengineered skin, tendons, bladders, bone, cardiac tissue, etc. These are fundamentally radical technologies for the target applications.

Below is my conceptual opinion on the balance of growth by clinical area coming from routine innovation (tweaks, improvements), radical innovation (whole new “paradigms” like cell therapy in cardiology), and emerging market growth (e.g., China, S. America).

Screen Shot 2016-06-22 at 1.56.13 PM

Source: MedMarket Diligence, LLC.

What is the ideal wound product?

The previously accepted wisdom was that a wound healed best when it was kept as dry as possible. In 1962, George Winter, a British-born physician, published his ground-breaking wound care research. His paper, (Nature 193:293. 1962), entitled, “Formation of the scab and the rate of epithelization of superficial wounds in the skin of the young domestic pig,” demonstrated that wounds kept moist healed faster than those exposed to the air or covered with a traditional dressing and kept dry. Dr. Winter’s work began the development of modern wound dressings which are used to promote moist wound healing.

Natural skin is considered the ideal wound dressing, and therefore wound dressings have been designed to try to reproduce the advantages of natural skin. Today, experts feel that a wound dressing should have several characteristics if it is to serve its purpose. A wound dressing should:

  • Provide the optimal moisture needs for the particular wound
  • Have the capacity to provide thermal insulation, gaseous exchange, and to help drainage and debris removal, which promotes tissue reconstruction
  • Be biocompatible without causing any allergic or immune response reaction
  • Protect the wound from secondary infections
  • Be easily removable without causing any trauma to the delicate healing tissues.

There are hundreds of dressings to choose from, but they all fall into one of a few categories. The healthcare provider will select a dressing by category, according to availability and familiarity of using that particular dressing.

Occlusive dressings are those which are air- and water-tight. An occlusive dressing is frequently made with some kind of waxy coating to ensure a totally water-tight bandage. It may also consist of a thin sheet of plastic affixed to the skin with tape. An occlusive dressing retains moisture, heat, body fluids and medication in the wound. There are several types of occlusive dressings, which are discussed below.

It should be remembered that proper wound care, especially of a chronic wound, is a complex process, as much art as science; a trained healthcare provider assesses the wound as it goes through various stages, and applies the appropriate wound dressings as the need arises. Unfortunately, the most appropriate dressing is not always used, due perhaps to confusion around which type of dressing to apply, or because certain dressings—especially advanced dressings—either may not be available in the facility, or may not be reimbursed by the country’s healthcare system, or may simply be too expensive. This remains true even in some of the developed countries.

The following table summarizes potential applications for various types of wound care products, with selected examples. This summary is meant as a guideline and an illustration of the fact that different dressing types may find use in various types of wounds. In addition, as a wound heals, it may need a different type of dressing. Here again the wound care professional’s judgment and training come into play.

Dressing categoryProduct examplesDescriptionPotential applications
FilmHydrofilm, Release, Tegaderm, BioclusiveComes as adhesive, thin transparent polyurethane film, and as a dressing with a low adherent pad attached to the film.Clean, dry wounds, minimal exudate; also used to cover and secure underlying absorptive dressing, and on hard-to-bandage locations, such as heel.
FoamPermaFoam, PolyMem, BiatainPolyurethane foam dressing available in sheets or in cavity filling shapes. Some foam dressing have a semipermeable, waterproof layer as the outer layer of the dressingFacilitates a moist wound environment for healing. Used to clean granulating wounds which have minimal exudate.
HydrogelHydrosorb Gel Sheet, Purilon, Aquasorb, DuoDerm, Intrasite Gel, Granugel,Colloids which consist of polymers that expand in water. Available in gels, sheets, hydrogel-impregnated dressings.Provides moist wound environment for cell migration, reduces pain, helps to rehydrate eschar. Used on dry, sloughy or necrotic wounds.
HydrocolloidCombiDERM, Hydrocoll, Comfeel, DuoDerm CGF Extra Thin, Granuflex, TegasorbÕ Nu-DermMade of hydroactive or hydrophilic particles attached to a hydrophobic polymer. The hydrophilic particles absorb moisture from the wound, convert it to a gel at the interface with the wound. Conforms to wound surface; waterproof and bacteria proof.Gel formation at wound interface provides moist wound environment. Dry necrotic wounds, or for wounds with minimal exudate. Also used for granulating wounds.
AlginateAlgiSite, Sorbalgon Curasorb, Kaltogel, Kaltostat, SeaSorb, TegagelA natural polysaccharide derived from seaweed; available in a range of sizes, as well as in ribbons and ropes.Because highly absorbent, used for wounds with copious exudate. Can be used in rope form for packing exudative wound cavities or sinus tracts.
AntimicrobialBiatain Ag, Atrauman Ag, MediHoneyBoth silver and honey are used as antimicrobial elements in dressings.Silver: Requires wound to be moderately exudative to activate the silver, in order to be effective
NPWDSNaP, V.A.C. Ulta, PICO, Renasys (not in USA), Prospera PRO series, Invia LibertyComputerized vacuum device applies continuous or intermittent negative or sub-atmospheric pressure to the wound surface. NPWT accelerates wound healing, reduces time to wound closure. Comes in both stationary and portable versions.May be used for traumatic acute wound, open amputations, open abdomen, etc. Seems to increase burn wound perfusion. Also used in management of DFUs. Contraindicated for arterial insufficiency ulcers. Not to be used if necrotic tissue is present in over 30% of the wound.
Bioengineered Skin and Skin SubstitutesAlloDerm, AlloMax, FlexHD, DermACELL, DermaMatrix, DermaPure, Graftjacket Regenerative Tissue Matrix, PriMatrix, SurgiMend PRS, Strattice Reconstructive Tissue Matrix, Permacol, EpiFix, OASIS Wound Matrix, Apligraf, Dermagraft, Integra Dermal Regeneration Template, TransCyteBio-engineered skin and soft tissue substitutes may be derived from human tissue (autologous or allogeneic), xenographic, synthetic materials, or a composite of these materials.Burns, trauma wounds, DFUs, VLUs, pressure ulcers, postsurgical breast reconstruction, bullous diseases

Source: MedMarket Diligence, LLC; Report #S251.

Medtech midterm; Cardiovascular procedures; Wound shifts; Fundings

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advanced medical technologies

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From MedMarket Diligence, LLC
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From “Medtech is Dead. Long Live Medtech“, here is some of what we can expect in the next 5-10 years in medtech:

  • Type 1 diabetes gradually becomes less burdensome, with fewer complications, and improved quality of life for patients.
  • Type 2 diabetes continues to plague Western markets in particular, despite advances in diagnosis, treatment, and monitoring due to challenges in patient compliance.
  • Cancer five year survival rates will dramatically increase for many cancers. The number of hits on Google searches for “cure AND cancer” will reflect this.
  • Multifaceted approaches available for treatment of traumatic brain injury and spinal cord injury – encompassing exoskeletons to help retrain/rehabilitate and increase functional mobility, nerve grafting, cell/tissue therapy, and others.
  • Organ/device hybrids will proliferate and become viable alternatives to transplant, or bridge-to-transplant, for pulmonary assist, kidney, liver, heart, pancreas and other organ.
  • Stem cells have had dramatic success, and the science will have improved, but challenges remain, especially since the excitement around stem and other pluripotent cells has created a climate not far removed from the wild west – the potential of such open territory being up for grabs has drawn hordes of activity, not all in the best interests of patients or shareholders. But in this time frame, specific treatments will likely have become standards of care for some diseases, while the challenge and opportunity remain for many others.
From “Global Dynamics of Surgical and Interventional Cardiovascular Procedures, 2015-2022”.

Cardiovascular Surgical and Interventional Procedures

  • Coronary Artery Bypass Graft Surgery
  • Coronary Mechanical and Laser Atherectomy
  • Coronary Angioplasty and Stenting
  • Mechanical Thrombectomy
  • Ventricular Assist Device Placement
  • Total Artificial Heart
  • Donor Heart Transplantation
  • Lower Extremity Arterial Bypass Surgery
  • Percutaneous Transluminal Angioplasty (PTA) and Bare Metal Stenting
  • PTA and Drug-Eluting Stenting
  • PTA with Drug-Eluting Balloons
  • Mechanical and Laser Atherectomy
  • Catheter-Directed Thrombolysis and Thrombectomy
  • Surgical and Endovascular Thoracic Aortic Aneurysm Repair
  • Surgical and Endovascular Abdominal Aortic Aneurysm Repair
  • Vena Cava Filter Placement
  • Endovenous Ablation
  • Venous Revascularization
  • Carotid Endarterectomy
  • Carotid Artery Stenting
  • Cerebral Thrombectomy
  • Cerebral Aneurysm and Arteriovenous Malformation (AVM) repair
  • Congenital Heart Defect Repair
  • Heart Valve Repair and Replacement Surgery
  • Transcatheter Valve Repair and Replacement
  • Pacemaker Implantation
  • Implantable Cardioverter Defibrillator Placement
  • Cardiac Resynchronization Therapy Device Placement
  • Standard SVT Ablation
  • Surgical AFIb Ablation
  • Transcatheter AFib Ablation

See Report #C500, published August 2016.

From “Worldwide Wound Management, Forecast to 2024”, Report #S251, published December 2015

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Source: Report #S251.

 

Selected Medtech Fundings, May 2016

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Source: Compiled by MedMarket Diligence, LLC

Pending Reports from MedMarket Diligence:

  • Global Nanomedical Technologies, Markets and Opportunities, 2016-2021. Details.
  • Global Dynamics of Surgical and Interventional Cardiovascular Procedures, 2015-2022. Details.
  • Worldwide Markets for Medical and Surgical Sealants, Glues, and Hemostats, 2015-2022. Details.

Patrick Driscoll
(patrick)
MedMarket Diligence