Wound management spans big to small, established to startup

See also the October 2015 report, “Worldwide Wound Management, Forecast to 2024:
Established and Emerging Products, Technologies and Markets
in the Americas, Europe, Asia/Pacific and Rest of World”, Report #S251.


 The worldwide wound management market is represented by a mixture of a small group of well established companies like Johnson & Johnson, 3M, KCI, Smith & Nephew, Systagenix and Covidien and a large number of mid-sized and smaller companies with niche product offerings; see Report S249 for a list of profiled companies (and note that we have profiled a select number of active companies discussed in the report).

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Source: MedMarket Diligence, LLC; Report S249.

The fastest-growing market segment is the Growth Factors market, with a compound annual growth rate well in excess of 20% annually since 2012. Favorable clinical evidence is a major driver of that growth. The largest product segment is Traditional Adhesive Dressings, followed by Negative Pressure Wound Therapy. The largely generic adhesive dressing continues to be used for the majority of wound care cases. Negative Pressure Wound Therapy is coming into increasing use as smaller devices allow use in non-hospital settings, and as the technology demonstrates efficacy.

The wound management market is, overall, a mature business sector which contains both long-established product groups and more recently developed approaches to wound care. Price competition remains the key strategy in maintaining value share for the major players. The major components of the market include:

  • Traditional wound care products, such as bandages, dressings and swabs made of generic cotton and textile fabrics.
  • Wound closure devices, including familiar devices such as sutures and staples, as well as newer methods of wound closure such as tissue sealants and glues; also hemostatic devices to help arrest bleeding while closing the wound. Wound closure devices are primarily used in surgery, and are not addressed in this report.
  • Advanced wound care (AWC) products. This umbrella covers dressings which are based on moist wound healing concepts, active therapies such as biomaterial composites and tissue engineered products, and products encompassing aspects of growth factors and angiogenesis. AWC products may be made of biopolymers, hydrocolloids, composites, foam materials, films, etc. These are used mainly for the treatment of chronic and slow-to-heal wounds.
  • Consumer wound care. This sector includes a wide range of wound care products, primarily for use in first aid. The consumer wound care market is not addressed in this report.

A company which develops expertise in engineering and manufacturing in one area of wound management will frequently leverage those skills by expanding into related areas of wound care. For this reason, a number of the leading wound management companies market products within most or all of these categories. When it comes to the advanced wound care products, wound management businesses may choose a strategy of partnering with specialist developers of these novel technologies. Such collaborations often lead to the larger firm acquiring the technology and/or the company that developed the technology, in order to bring the intellectual property in-house, as well as to optimize manufacturing and supply.

Global health care expenditure is expected to grow by at least 6% compound annual growth rate (CAGR) between 2011 and 2020. The demographic changes driving this growth include the aging of the population, the continuing increase in new technologies commanding ever higher prices, and improved understanding of disease processes. This last leads to development of new procedures, products, and therapy regimens to treat disease, which feeds (at least in the USA) into an increasing desire on the part of patients to have the latest and greatest in treatment, no matter the cost to society. Chronic wounds are born out of vascular disease and insufficiency, and diabetic conditions. These are prevalent within the older populations that are showing strongest growth in the developed economies.

Growth in Sales of Products in Cell Therapy and Tissue Engineering

Tissue engineering and cell therapy comprise a market for regenerative products that has been growing and will continue to grow at over 20% annually through 2018. This market spans many specialties, the biggest of which is therapies for degenerative and traumatic orthopedic and spine applications. Other disorders that will benefit from cell therapies include cardiac and vascular disease, a wide range of neurological disorders, diabetes, inflammatory diseases, and dental decay and/or injury. Key factors expected to influence the market for regenerative medicine are continued political actions, government funding, clinical trials results, industry investments, and an increasing awareness among both physicians and the general public of the accessibility of cell therapies for medical applications.

The current high rate of growth in cell therapy and tissue engineering product sales is due to the confluence of multiple market drivers:

  • Advances in basic science revealing the nature of cell growth, differentiation and proliferation
  • Advances by industry to manipulate and determine cell growth toward specific therapeutic solutions
  • Low barrier to entry for competitors in the market
  • Broad range of applications of cell/tissue advances to many different specialties with modest adaptation needed
  • Strong venture funding

The dominant clinical area driving cell therapy and tissue engineering product sales is orthopedics and musculoskeletal, wherein bone grafts and bone graft substitutes are well-established. Below is the projected balance of cell therapy and tissue engineering product revenues by clinical area through 2018.

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Source: MedMarket Diligence, LLC; Report #S520.

While orthopedics, musculoskeletal and spine applications will remain a huge share of this market, more growth is coming from cell/tissue products in most other areas, which have only recently (within the last five years) begun to establish themselves.

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Source: MedMarket Diligence, LLC; Report #S520.

Cellular Growth Factors in the Wound Management Market

From a previous post on growth factors in wound management, we highlight this due to a recent burst of activity in research leading to commercial products.


Extensive research has demonstrated that wound fluid is rich in growth factors. Growth factors are naturally occurring proteins found primarily in platelets and macrophages. They are needed for normal wound healing to promote growth and migration of fibroblasts, endothelial cells and keratinocytes. The functions of growth factors include; attraction of cells to the wound site (chemotaxis), stimulation of cell division/ proliferation (mitogenic competence/progressive), differentiation of cells into specific phenotypes (transformation), and stimulation of cells to perform functions or secrete other growth factors. Growth factors bind to receptors on the cell surface where they activate cellular proliferation and/or differentiation. There are a number of growth factors which are involved in wound healing at different points in time. Many are quite versatile and capable of stimulating cellular division in different cell types; others are specific to a particular cell type.

Growth factors applied to wound management fall into the following categories:

 

Growth
Factor
SourcesEffects
Epidermal growth factor (EGF)Activated macrophages. Salivary glands. KeratinocytesKeratinocyte and fibroblast mitogen. Keratinocyte migration. Granulation tissue formation
Transforming growth factor-? (TGF-?)Activated macrophages. T-lymphocytes. KeratinocytesHepatocyte and epithelial cell proliferation. Expression of antimicrobial peptides. Expression of chemotactic cytokines
Hepatocyte growth factor (HGF)Mesenchymal cellsEpithelial and endothelial cell proliferation. Hepatocyte motility
Vascular endothelial growth factor (VEGF)Mesenchymal cellsVascular permeability. Endothelial cell proliferation
Platelet derived growth factor (PDGF)Platelets. Macrophages. Endothelial cells. Smooth muscle cells. KeratinocytesGranulocyte, macrophage, fibroblast and smooth muscle cell chemotaxis. Granulocyte, macrophage and fibroblast activation. Fibroblast, endothelial cell and smooth muscle cell proliferation. Matrix metalloproteinase, fibronectin and hyaluronan production. Angiogenesis. Wound remodeling. Integrin expression regulation
Fibroblast growth factor 1 and 2 (FGF-1, FGF2)Macrophages. Mast cells. T-lymphocytes. Endothelial cells. FibroblastsFibroblast chemotaxis. Fibroblast and keratinocyte proliferation. Keratinocyte migration. Angiogenesis. Wound contraction. Matrix (collagen fibers) deposition
Transforming growth factor-? (TGF-?)Platelets. T-lymphocytes. Macrophages. Endothelial cells. Keratinocytes. Smooth muscle cells. FibroblastsGranulocyte, macrophage, lymphocyte, fibroblast and smooth muscle cell chemotaxis. TIMP synthesis. Angiogenesis. Fibroplasia. Matrix metalloproteinase production inhibition. Keratinocyte proliferation
Keratinocyte growth factor (KGF)KeratinocytesKeratinocyte migration, proliferation and differentiation

Source: MedMarket Diligence, LLC; Report #S249

The emergence and rapid adoption of growth factors in wound management is testimony to the expectation that they will hasten wound healing and result in better outcomes, lowered cost or both. While the market for growth factors in wound management is largely represented by the U.S. market (as with most advanced medical technologies), economics, technology diffusion and other forces will lead to more rapid growth in the use of these products in Asia/Pacific (in particular, China will see strong growth, given that powerhouse country’s propensity to bypass progressive development in favor of very rapid adoption of new technologies).

Distribution of Wound Growth Factor Markets, 2013 & 2021

GF-pie-2013-2021

Source: MedMarket Diligence, LLC; Report #S249

Feel free to contact us directly if you have further questions on the wound management market.

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.

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MedMarket Diligence, LLC; Report #S710

 

Use of Surgical Sealants for Cranial and Spinal Dura

Surgical sealants have an enormous range of applications in the treatment of acute and chronic wounds, but while the majority of sealant revenues derives from their use in the hemostasis, closure and sealant of tissues to prevent blood loss…

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Source: MedMarket Diligence, LLC; Report #S190

… a different niche use of sealants is stopping cerebrospinal fluid leaks and other dural wound treatments associated with cranial and spinal procedures. These include their use in:

  • Cranial and spinal dural plastic surgery to prevent CSF fistulas.
  • Dural plastic surgery in residual cavities following tumor removal.
  • Dural lacerations in hemilaminectomy operations

Of this, most of the use is currently in cranial applications, but use in spinal applications is growing considerably faster:

Screen Shot 2014-04-07 at 9.44.53 AM

Source: MedMarket Diligence, LLC; Report #S190

 

 

 

Medtech fundings in April 2014

Fundings for medical technology in April 2014 stand at $605 million, led by the $101.4 million raised by TriVascular Technologies in its IPO. Below is a list of the month’s top fundings to date:

Company funding Product/technology
TriVascular Technologies, Inc., has raised $101.4 million in an initial public offering, according to the company Technologies for the treatment of abdominal aortic aneurysms
HALT Medical, Inc., has rasied $92.8 million in two separate rounds of funding ($29.47 million and $63.34 million) according to two regulatory filings Radiofrequency thermal ablation of uterine fibroids
Holaira, Inc., has raised $42 million in a Series D round of funding according to press reports Catheter based device to treat COPD
SI-BONE, Inc., has raised $33 million in a round of funding according to the company Minimally invasive device technology for treatment of sacro-iliac joint conditions
Sequana Medical AG has raised $26 million in a round of funding according to press reports Implantable pump systems to manage fluid balance
Titan Medical, Inc., has raised $25.6 million in a public offering according to the company Robotic systems for minimally invasive surgery
Tendyne Holdings, Inc., has raised $25 million in a round of funding according to press reports Transcatheter aortic valve implant for treatment of mitral valve regurgitation

For the complete list of medtech fundings during April 2014, see link.

For a full list of the fundings in medtech, by month, since 2009, see link.

Fundings in Medtech 2009-2014: A Contrarian View

Since 2008, medtech has taken a lot of hits. Indeed, when the capital crunch hit, medtech was not viewed as the safest place for investment by a suddenly very risk averse world. Blue chip stock, high volume, low growth, STABLE markets became the norm for a lot of money. But, after a short while, it became apparent that medtech was hardly junk bonds or penny stock, especially considering the battle-hardened innovators of medtech who continued to seize on innovations that provided treatment where there once wasn’t, that accelerated healing, that measurably improved outcomes, that resulted in real cost savings to health systems and insurers, that, in other words, met DEMAND.

So, money came back to medtech. I tracked it then, and I track it now, month by month, funding by funding, company by company. Was it coming back in the pollyanna-esque windfalls of biotech and pharma? No, and I don’t think it ever has or ever will — nor should it. Biotech seems to perennially able to tap the “hope springs eternal” deep pockets of venture capital that can regularly draw individual fundings of $50 million, $75 million or $100 million. Pharmaceuticals don’t seem to go to the VC well as often, but when they do, their funding rounds are no less spectacular.

Medtech excels at crafting plain and simple solutions to disease, suffering, high healthcare costs and clinical need. Not every solution is a blockbuster — in fact, there are more than a few 510(k) products that should probably just be called “me, too”, since they do not distinguish themselves independently, at least not from a clinical or technology standpoint. But medtech has proven its ability to keep pushing the treatment envelope by innovating a little further to gain a bit more edge on outcome or cost or both.

So, medtech regularly pulls in $5 million, $10 million, $25 million at at time — frequently less, but not infrequently more.

My Contrarian View. But let me highlight again that medtech is a moving target and not everyone is thinking apples to your oranges.  What I consider medtech is, at its root, technologies that were traditionally represented as medical device treatments for disease and trauma. (And, yes, so I don’t have to answer this later on, by “medical device” I mean implants, instruments, instrumentation, even capital equipment.)  But medtech is not only medical device, for it is also (at least by my authoritarian definition, since this is my blog, but it is read by many in this field), anything and everything (within reason) that is either adjunctive to medical devices like drug delivery, like biomaterial-based implants/grafts, drug/device hybrids, tissue engineering and cell therapy (this latter is perhaps at the fringe of medtech, bordering on pure biotech).

Where’s the boundary of medtech? In my mind, it is anything and everything that competes with markets that have in the past and are to some extent still served by medical devices, equipment and supplies. For the sake of repetition, this is the definition I have posted on the medtech fundings I report on month by month in this blog (and in the online spreadsheets linked here):

What is “medtech”?: We view medical technology (medtech) as principally medical devices and equipment, but also all technologies that are directly competitive with or complementary to technologies represented by therapeutic or diagnostic medical devices/equipment.

Note: Historic coverage of “medtech” has been limited to medical devices, supplies and equipment. We feel that such a limited definition poorly reflects the true nature of the markets that once were limited to such products. In reality, assessing the markets and competition for medical devices by ONLY considering other medical devices would result in gross underestimations of both competition and market potential. Moreover, this is reflected in both the nature of medical devices (which may be hybrid device/bio/pharm products or products that may not be “devices” at all (especially in the typical definitions defined by material type and function) but that compete head-on with devices.

So, on this more liberal definition of medtech (which some still feel is too restrictive), I can point to a steady stream of investments that has been on an upward trend for the last five years. If you disagree, feel free to come up with your own definition(s), but here is the five year trend of medtech investment:

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Source: MedMarket Diligence, LLC

Looked at from a seasonal standpoint, this data is shown below:

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Source: MedMarket Diligence, LLC

The monthly data underlying both of these charts is at link. If that is not enough data for you, then you can look at a comprehensive listing of the individual fundings behind this at link.

New Technologies at Medtech Startups, March 2014

Below is the list of new medical technologies under development at startups recently identified and included this month in the Medtech Startups Database:

  • Cardiac assist device for patients otherwise needing transplant.
  • Custom surgical implants including using 3D printing.
  • Targeted, localized drug delivery.
  • Hemostatic dressing for non-compressible hemorrhage.
  • High resolution imaging in cancer
  • Image-guided surgery
  • Autologous cell therapy delivered at the intraoperative point of care.
  • Device to harvest bone grafts
  • Device and method for self-collection of samples to screen for HPV, chlamydia, and gonorrhea.
  • Implantable neuromodulation device for the treatment of chronic pain and overactive bladder.
  • Encapsulated pancreatic cells for treatment of type 1 diabetes.
  • Embolization device.
  • Deep brain stimulation for Alzheimer’s and other cognitive disorders.
  • Magnetoencephalography (MEG) and magnetocardiography (MCG).
  • Technologies to manage core temperature in critical care and post-surgical patients
  • New method to use pulse wave velocity to measure arterial stiffness as indicator of heart attack risk.
  • Minimally invasive hip implants and other orthopedic implants.
  • Orthopaedic implants.

For a historical listing of the technologies under development at medtech startups, see link.

Wound Market Analysis, A Case Study in Understanding the Context for Opportunity

See pending report #S251, “Worldwide Wound Management, Forecast to 2024”, Report #S251.

Analysis is a funny thing. If done thoroughly, accurately and carefully to represent a subject from all relevant angles, it can reveal very important considerations by those with a vested interest (e.g., in support of expensive investment).

Analysis is often driven by assumption. (“It seems to me that the relative significances of different wound management products vary from one country to another, or one region to another.”) So, analysts go looking for data that would support or reject that assumption. Here, one would be interested in the relative values of different wound product sales in different countries.

Ah, we have that data. Let’s plot the sales, as a percent of each region’s total, for the different categories of wound management products in the Americas, European Union, Asia/Pacific and Rest of World:

Screen Shot 2014-03-26 at 1.57.46 PM

 Source: MedMarket Diligence, LLC; Report #S249.

What striking results, the analyst says. Clearly, negative pressure wound therapy is much more common in the Americas than it is in the Rest of World. Other small-to-significant differences are seen in other product areas.

However, the better analyst would challenge the assumption or at least consider its relevance to important decisions (again, e.g., expensive investment).

This relative data was presented because it answered an assumption, that relative use of different wound management products varies by country/region. Of course, this is indeed true.

But that’s not the whole story.  Here, we have engaged ourselves in a careful analysis of deck chairs on top of a magnificent, unsinkable luxury liner.

The bigger picture, the more relevant context into which this analysis must fit is not simply the relative difference, but the absolute difference. If we take this question of wound product sales by geography and consider not the relative but the absolute differences, the picture changes considerably:

Screen Shot 2014-03-26 at 1.59.06 PM

Source: MedMarket Diligence, LLC; Report #S249.

Which analysis is correct?  Of, course, they both tell the truth, but neither tells the whole truth. One can gain a more comprehensive understanding by considering both and recognizing the significance of actions based on one or the other analysis.

But size and growth are not the only dimensions that factor into the potential interest by manufacturers. There is, of course, the degree to which the market is fragmented — how many competitors are carving up that high volume or high growth niche?  Here are some of the (3^3=9) combinations (of which many are possible):

  • High volume, low growth, fragmented: traditional wound dressings
  • High growth, low volume, unfragmented: growth factors
  • High growth, low volume, fragmented: bioengineered skin and skin substitutes
  • High growth, high volume, unfragmented:  ???

The opportunities available to manufacturers of wound management products clearly derive from each manufacturer’s strengths (technology, market presence, time-to-market, etc.), but the value of those opportunities and whether they should be pursued are factors that are dictated entirely by how each of those strengths match up against others in the market.  The wound management market has a highly diverse makeup of technology types, competitor types, clinical applications, clinical challenges, market forces and, ultimately, different competitive niches for product suppliers.

The increasing problem of chronic wounds, and their medtech solutions

Wounds have many different sources, etiologies and forms and, therefore, demand a range of approaches. By virtue of these differences, they have considerably different costs. At the top of the list of wound culprits driving up cost is the category of chronic wounds. Simply put, these wounds are very slow to heal due to poor circulation at the site (e.g., decubitus stasis, or pressure, ulcers), concomitant health issues (diabetes) and the difficulty in changing the local environment toward one with conditions more conducive to the healing process.

Chronic wounds are not the most common — that is a category represented by surgical wounds, in which the wound has been created medically or surgically in order to excise or otherwise manage diseased tissue. But surgical wounds, traumatic wounds and lacerations are by their nature acute and, especially for surgical wounds, can be surgically managed to create clean wound edges, good vascularization and other conditions that accelerate healing. Therefore, while the volume of surgical and traumatic wounds and lacerations is significant, their costs are manageable and their growth is unremarkable.

But the costs of chronic wounds are higher due to both the types of different products required and the length of time required for those products to be used. Moreover, given the association of chronic wounds with conditions that are growing in prevalence due to increasing incidence of obesity, diabetes and other conditions, combined with an aging population that is increasingly sedentary, the prevalence of chronic wounds is shifting the balance among wound types. Below is the balance of wound types by prevalence worldwide in 2011, followed by the projected balance of wound types in 2025.

Worldwide Share of Wound Prevalence By Type, 2011

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Source: MedMarket Diligence, LLC; Report #S190 and Report #S249.

 

Worldwide Share of Wound Prevalence By Type, 2025

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Source: MedMarket Diligence, LLC; Report #S190 and Report #S249.

Surgical wounds offer the potential for use of devices which can ensure hemostasis, prevent internal adhesions and anastomoses, secure soft tissue, and close the skin. Traumatic wounds also offer potential for skin closure products and for hemostats, and adhesion prevention during post-trauma surgery. New wound-covering sealant products may also offer potential for treatment of cuts, grazes, and burns.

Chronic wounds are generally not amenable to treatment by adhesives, sealants and hemostats unless the wound has either been debrided to a sterile bleeding surface (in which case it becomes like a surgical wound), or the product offers some stimulant activity. Many hemostats exhibit some inflammatory and cytokinetic activity, which has been associated with accelerated healing. However, this inflammatory activity has also been known to burn the patient’s skin. Chronic wounds are instead dealt with often by a combination of debridement, frequent dressing changes, products to address local vascular circulation and pressure (negative and positive) and others. Progress is being made in reducing the associated healing times, but a large opportunity remains.