Fundings in medtech in 2015 follow a common pattern in that most fundings are between $1 million and $5 million — in 2015 thus far, we have identified 111 separate fundings in the $1M-$5M range — with the aggregate value of all fundings in this range being $286 million. However, the size category with the highest cumulative fundings is fundings at $25 million to $50 million, of which there were 41 separate fundings, reflecting an aggregate of $1.36 billion.
Spine surgery is a relatively mature market — all segments of the spine can be treated, significant share has been garnered by a few major companies, and there are no radically new technologies disrupting current market positions. Yet, trends in the patient population, the active innovation by all companies (see further, below, on market shares per region), the fact that it remains an invasive procedure (even the best minimally invasive approaches have room for improvement), and the accelerating migration of advanced spine technologies to developing non-U.S. markets are all reasons why this “mature” market is anything but stagnant.
Success in applying minimally invasive approaches to spine fusion has opened up procedure volumes for more patients, resulting in the fastest growing area of spine fusion sales. Fusion devices are strong worldwide, with the non-U.S. markets lagging in volumes, but growing at markedly faster rates.
Below is illustrated the segment growth rates for major geographic regions.
The result of the faster non-U.S. growth is that the dominance of U.S. spine surgery markets will decline over the next decade. Below is the change in the share of the global spine surgery market represented by each reach from 2014. For example, the U.S. market will lose 6% of the global market between 2014 and 2021, while Asia-Pacific will gain roughly 5%.
The big players (Medtronic, DePuy, Stryker, Zimmer-Biomet) cumulatively control a large swath of the spine surgery market, yet many millions of dollars streams to hungry and innovative smaller spine companies. For example, below is the distribution of market shares for cervical fusion globally.
[August 21, 2015 — Mission Viejo CA — MedMarket Diligence has published its 2015 global report on spine surgery. For details, see link.]
Decades of clinical research and medtech innovation have combined to offer solutions for every segment of the spine. Economics and innovation have also made spine surgery one of the strongest growth of all medtech markets. MedMarket Diligence’s new global report on spine surgery device markets reveals opportunities for established, emerging, and potential medtech players.
The $9.17 billion global market for cervical fusion, thoracolumbar Implants, MIS spine fusion, interbody fusion, and orthobiologics has evolved dramatically over the last several decades as a result of significant advances in the understanding of spinal biomechanics, the proliferation of sophisticated spinal instrumentation devices, surgical advances in bone fusion techniques, refinement of anterior approaches to the spine and the emergence and development of microsurgical, minimally invasive methods and robotics. As a result of these advances it is now possible to stabilize every segment of the spine successfully, regardless of the offending pathology. The global market for spine surgery devices is detailed in the MedMarket Diligence report, “Global Market for Medical Device Technologies in Spine Surgery, 2014-2021.” See Report #M540.
“While this market may be dominated by the bigs — Medtronic, DePuy, Stryker, Zimmer-Biomet, et al. – there remains more than enough business in spine technology to attract a remarkably large number of mid-tier and smaller market participants,” says Patrick Driscoll of MedMarket Diligence. “And there are ample participants who do not accept the status quo, by aggressively innovating and introducing clinical and economic improvement in spine surgery.”
Spine fusion is the fastest growing technology in spine surgery and with growth in spine surgery being fastest in the Asia-Pacific and Central/Latin America, the growth of spine fusion in those areas is double-digit. The improvements in spine surgery and technology development have produced steady growth in volumes of surgeries, supported by reimbursement and clinical outcomes (and the increasingly active aging population). Spine surgery, with its exponential growth, has been the answer to an orthopaedic industry seeking to optimize earnings and add value for shareholders.
The MedMarket Diligence report, “Global Market for Medical Device Technologies in Spine Surgery, 2014-2021: Established and Emerging Products, Technologies and Markets in the Americas, Europe, Asia/Pacific and Rest of World,” (report #M540) is a detailed market and technology assessment and forecast of the products and technologies in the management of diseases and disorders of the spine. The report describes the diseases and disorders of the spine, characterizing the patient populations, their current clinical management, and trends in clinical management as new techniques and technologies are expected to be developed and emerge.
The report details the currently available products and technologies, and the manufacturers offering them. The report details the products and technologies under development and markets for each in spine surgery. The report provides a current and forecast assessment by region/country of procedures and manufacturer revenues for, specifically, Americas (United States, Rest of North America, Latin America), European Union (United Kingdom, Germany, France, Italy, Spain, Rest of Europe), Asia-Pacific (Japan, China, India, Rest of Asia/Pacific) and Rest of World. The forecast addresses the product- and country-specific impacts in the market of new technologies through the coming decade.
The report profiles 38 of the most notable current and emerging companies in this industry, providing data on their current products, current market position and products under development. The products and activities of numerous additional startup and emerging companies are also detailed in the report.
The market for spinal implants and associated spinal fusion products has evolved dramatically over the last several decades as a result of significant advances in the understanding of spinal biomechanics, the proliferation of sophisticated spinal instrumentation devices, surgical advances in bone fusion techniques, refinement of anterior approaches to the spine and the emergence and development of microsurgical, minimally invasive methods and robotics. As a result of these advances it is now possible to stabilize every segment of the spine successfully, regardless of the offending pathology.
Prior to these developments, the orthopedic industry had traditionally regarded spinal surgery as a “Cinderella” segment that — far from being a major market segment — was almost regarded as a service area supporting a relatively small number of highly specialized surgeons focusing on the clinical issues associated with the vertebral column. In contrast, by the beginning of the new millennia it became clear that an orthopaedic industry seeking to provide optimized earnings and value to share holders had identified this area as a major unmet need in which the demand to resolve an increasingly wide range of spinal conditions was growing exponentially.
In response to these developments, and in recognition that the market for spinal implants and associated spinal fusion products was and is growing, orthopedic companies have realigned their strategic approach by:
Providing greater resources to further product development.
Expanding of sales and marketing resources
Growing new and emerging geographic regions
It is anticipated that, collectively, these elements will further open the door to the development of implantable devices that can identically reproduce the elements of the spine that need to be reinforced or replaced by artificial. Accordingly, use of spinal fusion and instrumentation is anticipated to increase in the foreseeable future and continue to represent a better than average growth area in medtech.
MedMarket Diligence, LLC, has completed an analysis entitled, “Global Market For Medical Device Technologies in Spine Surgery, 2014-2020”. The report (#M540) will be published August 21, 2015, and will be downloadable in PDF and available in print for single, site, and global licenses. The report is described in detail, with a complete table of contents and list of exhibits, at link.
MedMarket Diligence is completing a global analysis of spine surgery technologies, scheduled for publication in August/September:
“Global Market For Medical Device Technologies in Spine Surgery, 2014-2021:
Established and Emerging Products, Technologies and Markets in the Americas, Europe, Asia/Pacific and Rest of World.” See link.
This report is a detailed market and technology assessment and forecast of the products and technologies in the management of diseases and disorders of the spine. The report describes the diseases and disorders of the spine, characterizing the patient populations, their current clinical management, and trends in clinical management as new techniques and technologies are expected to be developed and emerge. The report details the currently available products and technologies, and the manufacturers offering them. The report details the products and technologies under development and markets for each in spine surgery.The report provides a current and forecast to 2021 by region/country of procedures and manufacturer revenues for, specifically, Americas (United States, Rest of North America, Latin America), European Union (United Kingdom, Germany, France, Italy, Spain, Rest of Europe), Asia-Pacific (Japan, China, India, Rest of Asia/Pacific) and Rest of World. The forecast addresses the product- and country-specific impacts in the market of new technologies through the coming decade. The report profiles 75 of the most notable current and emerging companies in this industry, providing data on their current products, current market position and products under development.
See the full description and table of contents at Report #M540.
Medtech is resilient, adapting to the changing demands of patients, payers, regulators, and the economy, but only in the hands of the innovators who keep a finger in the wind on these demands.
Comprehensive outcomes versus symptomatic intervention. Competition in medtech, heightened by cost pressures in particular, is characterized by the demand for comprehensive solutions to disease/trauma rather than technologies that simply ameliorate symptoms. Manufacturers are focusing on longer term solutions, competing against the full spectrum of therapeutic alternatives rather than incremental improvements in their widgets.
Whatever the cost, make it lower. Cost is poorly understood in healthcare (hence the problem!), but it is recognized as important simply by the rate at which premiums increase, the percentage of GDP adding to healthcare spending, the cost of Medicare and other similar benchmarks. Cost is difficult to assess in medical technologies, because there are long term, unforeseen implications of nearly every medtech development. Nonetheless, the manufacturer who does not only bow down in homage to cost but also makes cost at least an implicit part of its value proposition will be quickly put out of business.
The life spans of “gold standards” of treatment are getting shorter and shorter. Technology solutions are being developed, from different scientific disciplines, at such a pace as to quickly establish themselves, in a broad enough consensus, as new gold standards. Physicians are increasingly compelled to accept these new new standards or find their caseload shifting to those who do.
Many manufacturers strive for being able to claim their products are “disruptive” — overturning existing paradigms. However, few medtech manufacturers really ever achieve anything more than marginal improvements. Note the relative amount of 510Ks versus PMAs in regulatory approvals (not that a PMA denotes a “disruptive” development).
Materials technologies are defining what is a “device” as well as what they can accomplish. Competitive manufacturers are aggressively gaining a broad understanding of materials technologies to encompass traditional device, pharma, biopharma, biotech, cell biology and others, ensuring their success from a broadly competitive position.
Interest in startup innovations by VCs and large-cap medtech companies has never been more intense, but funding still demands concrete milestones. Proof-of-concept gets entrepreneurs excited, but 510(K) or better is what gets the money flowing. This is not the credit-crunch of 2008, when the sour economy caused funding to largely dry up. Money is indeed flowing into medtech now, as evidenced by the IPO market and the volume of early stage funding, but potential investments — especially at very early stages — are no less intensively vetted. Startups must therefore carry the risk well into the development timeline, when the prospect of their products reaching the market has been demonstrated far more effectively.
Medtech markets are influenced by many forces, but none more strongly than the drive of companies to succeed. Reimbursement. Regulatory hurdles. Healthcare reform. Cost reduction, even a 2.3% medical device excise tax, et cetera, et cetera. None of these hold sway over innovation and entrepreneurship. And the rate of innovation is accelerating, further insulating medtech against adverse policy decisions. Moreover, that innovation is reaching a sort of critical mass in which the convergence of different scientific disciplines — materials technology, cell biology, biotech, pharma and others — is leading to solutions that stand as formidable buttresses against market limiters.
Information technology is having, and will have, profound effects on medical technology development. The manufacturers who “get” this will always gain an advantage. This happens in ways too numerous to mention in full, but worth noting are: drug and device modeling/testing systems, meta-analysis of clinical research, information technology embedded in implants (“smart” devices), and microprocessor-controlled biofeedback systems (e.g., glucose monitoring and insulin delivery). The information dimension of virtually every medtech innovation must be considered by manufacturers, given its potential to affect the cost/value of those innovations.
This is not a comprehensive list of drivers/limiters in medtech, but these stand behind the success or failure of many, many companies.
Patrick Driscoll is an industry analyst and publisher of content on advanced medtech markets through MedMarket Diligence.
(See the 2016 published report #S290, “Sealants, Glues, Hemostats, 2016-2022”.)
Of late, I have needed to re-emphasize the difference between absolute and relative growth in medtech markets (and its importance). So, here it is again, this time regarding surgical sealants and other wound closure products.
The lowest relative rate of growth in this industry is the well-established sutures and staples segment. Sales of these products globally, even supported by innovations in bioresorbables and laparoscopic delivery technologies, are only growing at a 5.6% compound annual growth rate from 2013 to 2018. By comparison, growth of sales of surgical glues and sealants is at 9.4% for 2013-2018.
But from an absolute sales growth point of view, sales of sutures and staples will go from $5.2 billion to $6.9 billion, or absolute growth of $1.7 billion. Simultaneously, the relatively high growth in surgical glues and sealants translates to the absolute growth from 2013 to 2018 of only $0.9 billion.
Obviously, both absolute and relative growth are of interest.
See updated analysis in Report #S290, “Sealants, Glues, Hemostats to 2022”.
Biologically active sealants typically contain various formulations of fibrin and/or thrombin, either of human or animal origin, which mimic or facilitate the final stages of the coagulation cascade. The most common consist of a liquid fibrin sealant product in which fibrinogen and thrombin are stored separately as a frozen liquid or lyophilized powder. Before use, both components need to be reconstituted or thawed and loaded into a two-compartment applicator device that allows mixing of the two components just prior to delivery to the wound. Because of the laborious preparation process, these products are not easy to use. However, manufacturers have been developing some new formulations designed to make the process more user friendly.
Selected Biologically Active Sealants, Glues, and Hemostats
Asahi Kasei Medical
CryoSeal FS System
Fibrin sealant system comprising an automated device and sterile blood processing disposables that enable autologous fibrin sealant to be prepared from a patient's own blood plasma in about an hour.
Fibrin sealant spray
Biodegradable fibrin sealant made of human fibrinogen and human thrombin. For oozing and diffuse bleeding.
Hemostatic bioresorbable sealant/glue containing human thrombin and bovine-derived, glutaraldehyde-crosslinked proprietary gelatin matrix. For moderate to severe bleeding.
Hemostatic sponge comprising Pfizer's Gelfoam hemostatic sponge, made of porcine skin and gelatin, packaged with human plasma-derived thrombin powder.
Fleece-type collagen hemostat coated with fibrin glue components.
Bristol-Myers Squibb/ZymoGenetics (Sold by The Medicines Company in the US and Canada)
First recombinant, plasma-free thrombin hemostat.
Beriplast P/Beriplast P Combi-Set
Freeze dried fibrin sealant. Comprised of human fibrinogen-factor XIII and thrombin in aprotinin and calcium chloride solution.
Haemocomplettan P, RiaSTAP
Freeze-dried human fibrinogen concentrate. Haemocomplettan (US) and RiaSTAP (Europe).
Evicel is a new formulation of the previously available fibrin sealant Quixil (EU)/Crosseal (US). Does not contain the antifibrinolytic agent tranexamic acid, which is potentially neurotoxic, nor does it contain synthetic or bovine aprotinin, which reduces potential for hypersensitivity reactions.
Absorbable fibrin sealant patch comprised of flexible matrix of oxidized, regenerated cellulose backing under a layer of polyglactin 910 non-woven fibers and coated on one side with human fibrinogen and thrombin.
BIOSEAL Fibrin Sealant
Low-cost porcine-derived surgical sealant manufactured in China by J&J company Bioseal Biotechnology and targeted to emerging markets.
Human thrombin for topical use as hemostat. Made of pooled human blood.
Bovine-derived topical thrombin hemostat.
Bovine collagen and thrombin hemostat.
Absorbable surgical patch made of collagen sponge matrix combined with human fibrinogen and thrombin.
Teijin Pharma Ltd/Teijin Group (Tokyo, Japan)
Company is working with Chemo-Sero-Therapeutic Research Institute (KAKETSUKEN) to develop a sheet-type surgical fibrin sealant. Product combines KAKETSUKEN's recombinant thrombin and fibrinogen technology with Teijin's high-performance fiber technology to create the world's first recombinant fibrin sealant on a bioabsorbable, flexible, nonwoven electrospun fiber sheet.
The Medicines Company (TMC)
Raplixa (formerly Fibrocaps)
Sprayable dry-powder formulation of fibrinogen and thrombin to aid in hemostasis during surgery to control mild or moderate bleeding.
The Medicines Company (TMC)
In development: Fibropad patch
FDA accepted company's BLA application for Fibrocaps in April 2014 and set an action date (PDUFA) in 2015. In November 2013, the European Medicines Agency agreed to review the firm's EU marketing authorization application. Status update in report #S192.
Thick, but flowable, thrombin-based mixture to prevent bleeding in the subcutaneous pectoral pockets created during pacemaker and ICD implantations.
Source: MedMarket Diligence, LLC
Note: Status of products detailed in Report S192. See UPDATED analysis in 2016 report #S290. Available online.