Aesthetic and Reconstructive Products Accelerating to Double Digit Growth Worldwide

Global medical aesthetic and reconstructive products, which include medical/surgical implants, materials, injectable products, energy-based devices (e.g., laser, RF), “cosmeceuticals” and other products used in aesthetic and/or reconstructive procedures, achieved sales of more than $6.5 billion in 2013. By 2018, the worldwide market for aesthetic/reconstructive products will reach $10.7 billion. The U.S. and the Latin America markets will have a CAGR close to 10%. The U.S. and Latin America will experience growth, respectively, of 9.2% and 10% in line with global trends. Of course, the global trend is largely represented by the U.S. market, which holds 45% of the total. Europe has been witnessing relatively a slower growth of 6.6% per year. Declining purchasing power, particularly in southern Europe affects the European market and this geographical segment is estimated at $1.84 billion in 2013 to reach $1.94 billion in 2018.

The Asia/Pacific region will have an overall CAGR of more than 14.1% driven by increasing demand and, accordingly, by the expanded access to technologies and products in China and by the continued high growth in the strong economies of Japan and South Korea. Overall, Asia will experience the strongest growth in aesthetic/reconstructive product sales, eventually eclipsing the total for the European market in 2018, reaching $2.24 billion. Globally, the growth of the market from 2013 and 2018 be a 10%+ compound annual growth rate.

Global Segmentation of All Surgical and Non-Surgical
Aesthetic/Reconstructive Procedures, 2013

Screen Shot 2014-03-17 at 12.55.55 PM

 

Source: MedMarket Diligence, LLC; Report #S710, “Global Markets for Products and Technologies in Aesthetic and Reconstructive Surgery, 2013-2018”.

 

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).

Newest Medtech Startups, and I do mean MEDTECH

Since you’re reading this, I am going to assume you have some interest in medical technology, and just to make it bluntly obvious, I’m going to hammer a definition of it so you know exactly what I mean and what I don’t mean. Why I do this will become clear, but simply put, it’s to keep me from going insane.

In the most liberal definition of “medical technology” (which can still be restrictive, as I’ll mention below), I mean “the adaptation of scientific knowledge to the practical application of medicine”.  In your travels, I am certain you have come across uses of the term “medtech” that seem expansively broad, such as those that are simply the application of virtually any kind of technology to medicine.

If you call your doctor, does that make your phone a medtech device? What about surgical gloves, since they’re really just gloves? Ah, but what about surgical gloves coated with a material that prevents formation of post-surgical adhesions? Then, too, what about devices for wireless transmission of BP, pulse, pCO2 and other vital signs — are they just glorified telephones?

The point is that there is a wide range of perspectives that may variously be brought to bear when considering medtech and, since not everyone has the same perspective, it’s important to understand which perspective is in play.

Today, I saw a post about “medtech” companies at this year’s SXSW conference. Intrigued, I read on, only to find that most of these are technologies that have been applied to medical applications (and some not even that), but are for the most part not “medical technologies”:

  • a medication compliance device that chimes when doses are missed
  • a thermometer that connects to your iPhone or Android device
  • a smart diaper that monitors select analytes to potentially reveal UTIs, type 1 diabetes, dehydration, etc.
  • motion sensor-enabled underwear with micro-airbags to reduce injuries from falls in elderly
  • shoes to reduce the risk of plantar fasciitis, complications from diabetic neuropathy, etc.
  • wearable baby monitor to detect ambient temperature, posture and movement
  • mobile device to connect patients with mental health professionals
  • cloud-based service to connect individuals to the health/wellness resources of their employers

(Of course, the bottom line for many is whether the FDA or any other relevant governing body would consider a device a “medical device” or would otherwise conclude that its function, design or application is such that it must be regulated as a medical device, but even under that sort of all encompassing consideration, many of the above technologies would not likely be called “medical devices”. However, it’s not my definition that matters in those cases; it’s the FDA’s.)

I’m not placing a judgment that these devices are somehow inferior — not my point at all.  I have no doubt that there are countless non-medical technologies that can be applied to medical applications to create huge demand and/or solve big problems.  I just have to draw the line somewhere as I seek to describe, characterize and analyze an already large universe of innovations — I’ll leave the analysis of iPhone-enabled or otherwise information technology-centered devices to those who are better suited to the task. (If, in addition to the implants, surgical devices and range of other technologies requiring a physician to actually use, I had to also analyze any of those iPhone-enabled widgets, I would go mad.) My focus is instead on innovations that are intrinsically medical applications of knowledge that have been developed to improve outcomes, tap unmet patient demand, reduce healthcare costs or otherwise improve healthcare delivery. 

Fundamentally, these are technologies that have been developed to reduce symptoms, hasten recovery from disease or trauma (surgically-induced or otherwise), facilitate the removal of malignant tissue, restore normal organ or system function, facilitate the ongoing management of chronic disease, provide differential diagnostic information to facilitate courses of treatment, and many, many similar. By now, you should have a sense of what technology I would consider “medical” and what technology may have a medical application but which is not itself “medical”.

So what? Well, to be very specific, these are the most recent additions of startup companies to our Medtech Startups Database:

Company Product/technology
Medallion Therapeutics, Inc. Targeted, localized drug delivery
PB&B S.A. Use of biomaterials in aesthetics for non-surgical temporary & permanent breast and buttock enhancement, facial rejuvination solutions and adipose tissue engineering related therapies.
TS3 Medical, Inc. Vascular drill to cross chronic total obstructions (CTOs) and facilitate balloon angioplasty and stenting.
SynerZ Medical, Inc. Developing a device that mimics the actions of gastric bypass surgery for the treatment of obesity and Type 2 diabetes.
Biotrace Medical, Inc. Temporary cardiac pacing as treatment for reversible symptomatic bradycardia.
Rbpark, LLC Embolectomy devices
NeuroTek Medical, Inc. Non-invasive, migraine therapy device worn on the back of the head at the onset of or during a migraine to relieve pain.
RegenEye, LLC Ocular stent for treating age-based vision changes.
Reveal Optical, LLC Ophthalmic device company focusing on age-related macular degeneration (AMD), diabetic retinopathy, retinitis pigmentosa, hemianopia, and glaucoma.
Mimedis AG Custom surgical implants including using 3D printing.
Socrates Health Solutions, Inc. Noninvasive blood glucose monitor.
Gecko Biomedical Biodegradable sealants and adhesives in surgery.

Source: MedMarket Diligence, LLC

Entrepreneurs have for years been relentlessly conceiving and implementing innovations for therapeutics and diagnostics that leverage the advances in materials sciences and the individual and combined gains in understanding the onset, development and intervention to palliate, cure or otherwise eliminate disease.  Developments such as these have had a profound impact on patients’ lives and the costs (of all kinds) in the end result. 

Combine these medtech developments with other non-medtech developments in additional innovative ways and an even bigger impact can be made. 

Sales of Sealants, Hemostasis, Other Closure a Large, Shifting Market Worldwide

Products that provide hemostasis, closure, sealing and anti-adhesion of wounds comprised long established products (e.g., tapes, sutures, etc.) as well as a variety of advanced products such as fibrin and other surgical sealants, surgical glues, hemostats and products to prevent post-surgical adhesion.  While traditional products are being innovated to keep pace with advanced products (for example, through the development of absorbable sutures), the shift of caseload and product sales away from traditional products appears unrelenting.

As a result, the balance of the competitive landscape is forecast to shift over the next few years toward advanced sealing, hemostasis, closure and anti-adhesion products.  Below is illustrated, in a combined “donut” chart, this shift from 2012 to 2017 in the share of the global market for these products.

sealants_donut_2012-2017

Source: MedMarket Diligence Report #S190, “Worldwide Surgical Sealants, Glues, Wound Closure and Anti-Adhesion Markets, 2012-2017.”

These percentage shifts may not seem significant unless one considers that the global market for these products is well over $14 billion.

 

Potential for the Use of Hemostats, Sealants, Glues and Adhesion Prevention Products, Worldwide

The MedMarket Diligence Report #S190, “Worldwide Surgical Sealants, Glues, Wound Closure and Anti-Adhesion Markets, 2012-2017”, details the complete range of sealants & glues technologies used in traumatic, surgical and other wound closure, including tapes, sutures/staples/mechanical closure, hemostats, fibrin sealants/glues and medical adhesives and anti-adhesion products. The report details current clinical and technology developments, with data on products in development (detailing market status) and on the market; market size and forecast; competitor market shares; competitor profiles; and market opportunity. The report provides full year actual data from 2011. The report provides a worldwide forecast to 2017 of the markets for these technologies, with emphasis on the market impact of new technologies through the forecast period. The report provides specific forecasts and shares of the worldwide market by segment for Americas (detail for U.S., Rest of North America and Latin America), Europe (detail for United Kingdom, German, France, Italy, Spain, Rest of Europe), Asia/Pacific (detail for Japan, Korea, Rest of Asia/Pacific) and Rest of World. The report provides background data on the surgical, disease and traumatic wound patient populations targeted by current technologies and those under development, and the current clinical practices in the management of these patients, including the dynamics among the various clinical specialties or subspecialties vying for patient population and facilitating or limiting the growth of technologies. The report establish the current worldwide market size for major technology segments as a baseline for and projecting growth in the market through 2017. The report assesses and projects the composition of the market as technologies gain or lose relative market performance over this period. The report profiles 122 active companies in this industry, providing data on their current products, current market position and products under development.

See description, table of contents and list of exhibits at http://mediligence.com/rpt/rpt-s190.htm.

New fundings in medical technology, March 2014

Fundings for medical technology in March 2014 stand at $593 million, led by the $101 million raised by Golden Meditech Holdings Ltd and the $75 million IPO funding of Lumenis. Below is a list of the month’s top fundings to date:

Company funding Product/technology
Golden Meditech Holdings Ltd has raised $101 million in a round of funding according to press reports Autologous blood recovery products as well as healthcare services
Lumenis Ltd has raised $75 million in an initial public offering according to the company RF and light-based ablation devices in ophthalmology, surgery and aesthetics
Unilife Corporation has secured $60 million in debt funding, according to the company Drug delivery devices
Alphatec’s Spine, Inc., has raised $50 million in a round of funding, according to the company Devices for the treatment of spine disease and trauma
NinePoint Medical, Inc., has raised $38.56 million of a planned $50 million round of funding according to a regulatory filing In vivo, high resolution imaging via optical coherence tomography
Invuity, Inc., has raised $36 million in a Series E round of funding according to the company Technologies to improve access and visualization in minimally invasive surgeries
EarLens Corp. has raised $36 million of a planned $38 million round of funding according to press reports Infrared-based hearing aid

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

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

Technologies at medtech startups in February-January 2014

Below is a list of the technologies under development at startups recently identified and included in the Medtech Startups Database:

  • Ophthalmology prescreening technology for detection of diabetic retinopathy, cataract, glaucoma, cornea problems and refractive errors.
  • Tissue engineered scaffolds to generate synthetic tracheas.
  • Embolectomy devices
  • Resorbable embolization material for use in interventional radiology and drug delivery.
  • Tissue attachment technology
  • Devices and procedures to improve nasal breathing.
  • Devices for minimally invasive, augmentative or reconstructive mastopexy.
  • Ocular stent for treating age-based vision changes.
  • Ophthalmic device company focusing on age-related macular degeneration (AMD), diabetic retinopathy, retinitis pigmentosa, hemianopia, and glaucoma.
  • Neuroscience-based technology (neuromodulation) for enhancing performance on cognitive tasks, for the healthy and impaired.
  • Portable, ultrasound-based device non-invasive, transcranial diagnosis of stroke.
  • Temporary cardiac pacing as treatment for reversible symptomatic bradycardia.
  • Product to improve treatment of kidney stones and product to reduce pneumonia in intubated patient and ventilated patients in the ICU.
  • Biometric medical device for orthopedic and other diagnostic applications.
  • Technologies for treating urological conditions and disorders.
  • Use of biomaterials in aesthetics for non-surgical temporary & permanent breast and buttock enhancement, facial rejuvination solutions and adipose tissue engineering related therapies.

For a historical listing of medtech startup technologies, see link.

New medical technology fundings, February 2014

Fundings for medical technology in February 2014 totaled $537 million, buoyed by the $104.7 million funding of HeartFlow, Inc.. Below is a list of the month’s top fundings:

Company funding Product/technology
HeartFlow, Inc., has raised $104.7 million in a round of funding according to a regulatory filing Fractional flow reserve measurement for assessment of coronary artery disease
Paradigm Spine has established a $75 million credit facility with PDL BioPharma according to press reports Minimally invasive treatments for spinal stenosis
GC Aesthetics has raised $60 million in a round of funding according to the company Breast implants and other products in aesthetics
Direct Flow Medical, Inc., has raised $50 million in a debt funding according to press reports Aortic valve implant for treatment of mitral valve regurgitation
Seno Medical Instruments, Inc., has raised $34.6 million of a planned $39 million Series C round of funding according to press reports Opto-acoustic imaging for diagnostics, initially targeted as an adjunct to mammography
Alimera Sciences, Inc., has raised $37.5 million in funding according to the company Ophthalmic drug-device technology
Cheetah Medical Ltd has raised $28.85 million according to a regulatory filing Continuous, non-invasive cardiac output and hemodynamic monitoring based on “bioreactance” technology

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

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

Pressure ulcers in chronic wound management

Manufacturers of medical products have a primary focus on developing products that target underserved treatment areas, reduce the cost of care, or both. In one of the largest and most long-term treatment markets — wound management — a major focus of development is therefore the technologies to accelerate and improve the outcomes in the treatment of chronic wounds, which otherwise linger in healthcare systems, generating long-term direct and indirect costs. Among the most common types of chronic wounds are pressure ulcers.

Pressure ulcers, or bedsores, are areas of local necrosis resulting from vascular insufficiency due to the prolonged application of pressure to the tissues. There is an important relationship between the magnitude of pressure applied to the capillary bed and the duration that pressure is applied. Pressure ulcers are more likely to occur under relatively low pressures over long periods of time rather than under short episodes of high pressure. A healthy adult can develop a pressure ulcer if pressure sufficient to close capillaries (25-32 mm Hg) is applied for sufficient time, such as when undergoing a lengthy surgical procedure. In the compromised or elderly patient, significantly lower pressures may lead to pressure ulcer formation.

Pressure ulcer formation is enhanced through the additional application of shearing forces, friction, and moisture.

Shearing occurs when the skin is anchored to a surface, such as a bed or chair, and restrained from sliding over the surface while the underlying tissues are forced to move. The shearing force contributes to the destruction of deep tissue through the angulation and obstruction of blood vessels and excessive stretching of tissue. Shear occurs when a patient left sitting in a bed is pulled down into a slouch by gravity. The skin will adhere to the bed linen, while the coccyx will gradually drag the underlying tissue downward. Shearing forces may result in a disruption of the dermal-epidermal junction and produce blisters. Proper and frequent repositioning of a patient can reduce both pressure and shearing forces.

Friction occurs when the adhesion to the surface is not quite sufficient to prevent sliding, but sufficient to impart resistance to motion, that results in heat and wearing away of the outer layers of the skin. A patient who has slid down toward the bottom of the bed and is dragged back to the top will experience friction on the heels and other bony prominences. For this reason patients should be lifted back into position, and sliding over the bed surface should be avoided. Dressings that protect against friction and mattress covers with a low friction coefficient are helpful.

Moisture that is in prolonged contact with the skin produces maceration and reduction in the skin’s ability to tolerate additional stress. Macerated skin has a higher friction coefficient, increasing the likelihood of damage from friction and shear. Several sources of moisture are common in hospital and nursing home situations, including perspiration and urinary and fecal incontinence. Moisture may lead to fungal infections, and fecal incontinence can generate infections by E. coli. Thus, moisture may contribute to wound formation and present complications to wound healing.

Ulcer Classification

Several pressure sore classification systems have been used since 1975, including the Shea Pressure Sore Classification (1975), and the International Association of Enterostomal Therapy (IAET) pressure ulcer classification (1987).

  • Stage I ulcers are indicated by damaged friable surface skin with considerable hidden cell death caused by continuous pressure damage usually from immobilization in a single position. Identification of signs of pain and early indications of visible damage is a significant event in that it alerts caregivers of the need for interventions to prevent more serious damage.
  • Stage II ulcers present as partial thickness wounds, which may heal with early intervention by regeneration under advanced wound care techniques.
  • Stage III ulcers are usually full-thickness pressure sores. These are often difficult to classify due to the presence of eschar that obscures visualization of the wound bed. The presence of eschar does indicate a full thickness wound but the eschar must be debrided before classification can be established.

    Early Stage III or Stage IV pressure ulcers may superficially resemble Stage I ulcers. A wound initially classified as Stage I may, therefore subsequently appear to progress to higher stages as the already damaged deeper tissues slough off or as auto-debridement occurs with moist wound healing therapy.

  • Stage IV pressure ulcers are characterized by full thickness skin loss with extensive destruction, tissue necrosis, or damage to muscle, bone, or supporting structures (e.g., tendon, joint capsule). Undermining of healthy surrounding skin and sinus tracts may also be associated with Stage IV pressure ulcers.

 

Products and markets in the treatment of chronic wounds are covered in the comprehensive global report on wound management from MedMarket Diligence. See link.

Medtech fundings in January near $500 million

Fundings of medical technology companies for January 2014 came in at $497 million, topped by the nearly $51 million funding of BPH treatment company NeoTract, followed by large fundings by Ivantis, AqueSys, Humacyte, Suneva Medical, Vital Therapies and Entellus Medical.

For the complete list of January 2014 medtech fundings we identified, see link.

For a historical list of medtech fundings by month, see link.

Follow the money: medical technologies funded in January 2014

In descending order in the amount of funding received by the developing company, below is a list of the technologies in development at companies funded in January 2014:

  • Device-based and other treatments for glaucoma
  • Gel stent treatment for glaucoma
  • Tissue-based vascular grafts and other regenerative medicine products
  • Aesthetics products
  • Minimally invasive treatment for sinusitis
  • Cryotherapy for tissue ablation of multiple pathology types
  • Diagnostic monitoring technology with applications including medication adherence, oximetry, glucose monitoring and others
  • Heat-activated liposomal drug delivery for treatment of cancer
  • Device treatment for venous reflux related to formation of varicose veins
  • Laser for cataract surgery
  • Renal denervation via radiofrequency ablation for the treatment of hypertension
  • Absorbable surgical adhesives and sealants
  • Minimally invasive spine technologies including interspinous fusion
  • Ophthalmology prescreening device for diagnosis of major vision disorders
  • Peptide-mediated, in vivo cancer imaging
  • Device to expedite orthodontic treatment
  • Catheter-based endoscopic devices for the diagnosis of gastrointestinal cancers
  • Surgical skin closure devices
  • Convection-enhanced drug delivery to enable crossing the blood brain barrier in CNS conditions
  • Optical coherence tomography for skin cancer diagnosis
  • Electromagnetic navigation bronchoscopy for early detection of lung cancer
  • Devices for single incision laparoscopy
  • Low energy treatment for atrial fibrillation
  • Hip fracture fixation
  • Transcranial magnetic stimulation for treatment of migraine
  • Diagnosis and treatment of cardiac arrhythmias
  • Laparoscopic monopolar electro-surgical instruments
  • Device for the treatment of obstructive sleep apnea
  • Devices used for positioning in hip arthroplasties
  • Wireless implantable microelectronic lumbar spine fusion sensor
  • Neurosurgery instrumentation
  • Light-based cancer detection and diagnosis
  • Technology to detect cancer cells remaining following surgery
  • Diagnostic test systems for point-of-care use
  • Coil embolization and occlusion in endoluminal procedures
  • Interbody fusion device
  • Burn, wound and skin care products

For the companies and their funding amounts, see link.