Category Archives: economy

Over $24 Billion in Spent on Plastic Surgery Worldwide

And that’s just the product sales including implants, fillers, and other products used for aesthetics and reconstruction. It doesn’t include the physician fees, the outpatient site fees and other money spent.

There are two parts to this, of course. Plastic surgery has two faces — reconstruction and aesthetics, the first medically-indicated and the second elective.  Of course, the surgical reconstruction of anatomy and outward appearance to restore what has been lost to disease or trauma (the medically-indicated side of plastic surgery) has  benefitted greatly by the expertise and medtech innovation of aesthetics (the elective side).  Because of this, the market for products in plastic surgery has elements of both the traditional medtech market (reimbursement, economy-independed funding) and consumer markets (elective products, sensitivity to general economic conditions).

Overall, the market for these products is growing at a compound average of 7.9%, which is a strong but not extraordinarily high growth rate for a medtech market. Within it, of course, there is wide variation in the growth rates of plastic surgery product sales. Below is illustrated the aesthetics and reconstructive surgery products market from 2013 to 2018.

Screen Shot 2014-04-07 at 1.57.15 PM

MedMarket Diligence, LLC; Report #S710

 

Top Locations for New Medtech Companies

Medical technology thrives in geographic locations where economics, access to intellectual property, tax incentives and other synergies and infrastructure support it. Reflecting this is the locations where entrepreneurs decide to locate their medical technology startups. As an exercise, we compressed roughly 10+ years of data collected for our Medtech Startups Database to reveal the geographic locations in which there was the most concentration.

From a country standpoint, it should not be surprised that, by virtue of its population, economic strength and many other determinants, the United States is the most common country in which medtechs get started. Below is the list of the top countries in our Medtech Startups Database, ranked in descending order by the number of startup companies:

  1. USA
  2. Israel
  3. Switzerland
  4. United Kingdom
  5. France
  6. Germany
  7. Ireland
  8. Canada
  9. Australia
  10. Sweden
  11. Denmark
  12. Finland
  13. India
  14. Belgium
  15. Hungary
  16. Japan
  17. Korea
  18. Netherlands
  19. New Zealand
  20. Singapore

Since the U.S. is the most common country for new medtechs, it follows that the top cities in which all startups would be founded are in the U.S. The exception to this is Israel’s M.P. Misgav, a very concentrated area of investment and development in that country. The rest of the top cities are indeed U.S., with cities in California the most prevalent in the list (in descending order):

  1. Palo Alto, CA
  2. Menlo Park, CA
  3. San Diego, CA
  4. San Francisco, CA
  5. Cleveland, OH
  6. Cambridge, CA
  7. Mountain View, CA
  8. Irvine, CA
  9. New York, NY
  10. Austin, TX
  11. Redwood City, CA
  12. Boulder, CO
  13. Fremont, CA
  14. Minneapolis, MN
  15. Sunnyvale, CA
  16. Houston, TX
  17. Chicago, IL
  18. M.P. Misgav (Israel)
  19. Salt Lake City, UT
  20. Lexington, KY

It is noteworthy that, from our periodic review of startups, the locations that have been progressively moving up the chart are Austin, Boulder and Mountain View, while locations that have seen fewer startups than were newly located there in the past are Minneapolis and Chicago (we will leave it to others to speculate the reasons behind these ups/downs).

Global and regional growth rates for wound care product sales

Manufacturers of wound care products, from traditional dressings and bandages to growth factors and bioengineered skin, see variable sales growth driven by different levels of new product adoption, variations in clinical practices, and other technology, reimbursement, regulatory, economic and other forces that vary by geography across the globe. The balance of sales across multiple wound care product types can be radically different from country to country and region to region.

Emerging from the 2013 analysis (Report #S249) by MedMarket Diligence are the current and forecast wound care product sales resulting from the net effect, region by region, of these multiple forces. Below is illustrated the high growth country/product segments in wound management, reflecting the rapid adoption of new technologies such as growth factors and bioengineered skin, as well as older products such as alginates that are gaining sales in rapidly developing economies.

wound-country-high

Source: MedMarket Diligence, LLC; Report #S249, “Wound Management, Worldwide Market and Forecast to 2021: Established and Emerging Products, Technologies and Markets in the Americas, Europe, Asia/Pacific and Rest of World.”

At the other end of the extreme are those very well established products growing at less than anemic rates in countries where the economy is not as robust and/or where the growth has been superseded by sales of more novel products. Conventional dressings and bandages offer considerably less demand than do growth factors, bioengineered skin and skin substitutes and similar new products.

wound-country-low

Source: MedMarket Diligence, LLC; Report #S249

Of course, growth of sales in wound management products (and any product) is defined as the percentage change in sales volume over time. Smaller markets (typically soon after they have formed as a result of their initial commercialization) tend to grow on a percentage basis much faster. Indeed, a $1 dollar sale in year 1 followed by a $2 sale in year 2 represents a 100% growth rate, while a $1 increase in sales from year 1 to year 2 for a $100 million market represents virtually zero growth. Conversely, a 1% increase in a $1.75 billion market is a $17.5 million increase. This is indeed obvious, but must be kept in mind when considering the growth rates discussed above.

Medtech Financing: August 2013 and Trend 2009-2013

Fundings in medical technology for August 2013 came in at $478 million, driven in huge part by the $167.7 million funding of ConforMIS, without which the month’s fundings total would have been rather unremarkable, but which certainly cannot be ignored (“Other than that, Mrs. Lincoln, how did you enjoy the play?”).  The complete list of August 2013 fundings is detailed at link.

The trend in funding year-to-year in medtech shows two significant trends: first, it illustrates a kind of seasonality, though not perfectly so, in the ups and downs occurring at common times during the year (at least between March and June); and, second, in the unambiguous upward trend in fundings, at least since we began plotting the fundings in early 2009.

The year-to-year pattern is illustrated below (using smoothing primarily for aesthetics):

funding-seasonal-2009-2013

Source: Compiled by MedMarket Diligence, LLC

The four-year trend is shown below, with the trendline computed and shown over the monthly data (the raw data is at link):

funding-trendline-2009-2013

Source: Compiled by MedMarket Diligence, LLC

For reference, the total fundings for the years 2009 through 2013 (run rate) are:

Year
Fundings
($millions)
Growth over prior year
2013 (run rate)$6,22143%
2012$5,014-2%
2011$5,12143%
2010$3,5939%
2009$3,290--

Source: Compiled by MedMarket Diligence, LLC

Reference reports in Ophthalmology, Coronary Stents and Tissue Engineering

MedMarket Diligence has added three previously published, comprehensive analyses of  medtech markets to its Reference Reports listings. The markets covered in the three reports are:

  • Ophthalmology Diagnostics, Devices and Drugs (see link)
  • Coronary Stents: Drug-Eluting, Bare, Bioresorbable and Others (see link)
  • Tissue Engineering, Cell Therapy and Transplantation (see link)

Termed “Reference Reports”, these detailed studies were initially completed typically within the past five years. They now serve as exceptional references to those markets, since fundamental data about each of these markets has remained largely unchanged. Such data includes:

  • Disease prevalence, incidence and trends (including credible forecasts to the present)
  • Clinical practices and trends in the management of the disease(s)
  • Industry structure including competitors (most still active today)
  • Detailed appendices on procedure data, company directories, etc.

Arguably, a least one quarter of every NEW medtech report contains background data encompassing the data listed above.  Therefore, the MedMarket Diligence reports have been priced in the single user editions at $950 each, which is roughly one quarter the price of a full report.

See links above for detailed report descriptions, tables of contents, lists of exhibits and ordering. If you have further questions, feel free to contact Patrick Driscoll at (949) 859-3401 or (toll free US) 1-866-820-1357.

See the comprehensive list of MedMarket Diligence reports at link.

 

Medical technology being redefined by forces, innovation

One of the significant challenges in current markets for medical technology is the evolving definitions that dictate the nature of the competitive landscape. The unrelenting economic forces underpinning medtech — to drive down the cost of healthcare — have forced manufacturers to respond to competition that is broader, more aggressive and centered considerably less on “features” than on “benefits”, with benefits under intense scrutiny. Healthcare systems have limited the number of contracted vendors and the lower prices have reduced manufacturers’ margins, which has shaken out those unable to compete on cost and resulted in a market increasingly characterized by a much smaller number of competitors who must compete against all therapeutic alternatives, regardless of the nature of the technology approach.

In a very real sense, medical technology has in fact enabled these forces as manufacturers have responded to the market forces by developing products that compete, cost effectively, on a broader therapeutic scale. Innovators have been steadily stretching the boundaries of possibility through advanced materials technologies development (polymers, hybrids and embedded drugs, nanomaterial and other coatings, etc.). Researchers in basic and applied sciences are combining understanding from multiple disciplines impacting medtech performance — the benefits of understanding in cell biology, molecular biology, biochemistry, chemistry, flow dynamics, computer science, statistics, physics, and others are increasing the performance in vivo of new medical technologies.

As a result, the nature of medical technology has changed, particularly relative to competition. Below is a THEN and NOW view of medical technology.

medtech-defs1

Source: MedMarket Diligence, LLC

 

High and low growth wound care sales by country

Wound care product sales are growing at wildly variable rates around the world, with extremes spanning from the emergence of new technologies in rapidly growing economies to the technologies with low innovation in sluggish economies.

MedMarket Diligence’s global analysis of wound care products, technologies, companies and markets reveals the full spectrum of growth rates for well established to rapidly emerging products.

Below is illustrated the high growth country/product segments in wound management, reflecting the rapid adoption of new technologies such as growth factors and bioengineered skin, as well as older products such as alginates that are gaining sales in rapidly developing economies.

wound-country-high

Source: MedMarket Diligence, LLC; Report #S249, “Wound Management, Worldwide Market and Forecast to 2021:  Established and Emerging Products, Technologies and Markets in the Americas, Europe, Asia/Pacific and Rest of World.”

At the other end of the extreme are those very well established products growing at less than anemic rates in countries where the economy is not as robust and/or where the growth has been superseded by sales of more novel products. Conventional dressings and bandages offer considerably less demand than do growth factors, bioengineered skin and skin substitutes and similar new products.

wound-country-low

Source: MedMarket Diligence, LLC; Report #S249

Of course, growth of sales in wound management products (and any product) is defined as the percentage change in sales volume over time. Smaller markets (typically soon after they have formed as a result of their initial commercialization) tend to grow on a percentage basis much faster. Indeed, a $1 dollar sale in year 1 followed by a $2 sale in year 2 represents a 100% growth rate, while a $1 increase in sales from year 1 to year 2 for a $100 million market represents virtually zero growth. Conversely, a 1% increase in a $1.75 billion market is a $17.5 million increase. This is indeed obvious, but must be kept in mind when considering the growth rates discussed above.