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.”

The future (of medicine) is biology

It was once quite convenient for manufacturers of deluxe medical widgets to worry only about other manufacturers of deluxe medical widgets. Manufacturers must now widen their perspective to consider current and future competition (and opportunity) from whatever direction it may come. –> Just thought I might chime in and suggest that, if you do make such widgets, it might be a good idea to maybe throw at least an occasional sidelong glance at biotech. (Most of you are, great, but some of you think biotech is too far away to compete…)

Organ Bioengineering is years away and poses little challenge to medical devices …FALSE.  Urinary bladders have been engineered for pediatric applications. Bioengineered skin (the “integumentary” organ) is now routinely bioengineered for burns, chronic wounds, and other wound types. Across a wide range of tissue types (bone, cardiac, smooth muscle, dermal, etc.) scientists — clinicians — have rapidly developed technologies to direct the construction and reconstruction of these tissues and restore their structure and function.

Cell Biology. Of course cells are engineered into tissues as part of the science of tissue engineering, but combine this with advances in engineering not just between cells but between cells AND within cells and (…sound of my head exploding). With the sum of the understanding and capacity to control we have gained over cellular processes over the past few decades now rapidly accelerating, medical science is fast approaching the point at which it can dictate outcomes for cell, tissues, organs, organ systems, and humans (I am not frightened, but excited, with caution).  Our understanding and proficiency gained in manipulating processes from cell division to pluripotency to differentiation to senescence to death OR NOT has profound consequences for fatal, debilitating, incurable, devastating, costly, and nearly every other negative superlative you can conceive.

CRISPR*: This is a new, relatively simple, but extraordinary tool allowing researchers or, more importantly, physicians to potentially swap out defective genes with healthy ones. See Nature.
(* clustered regularly interspersed short palindromic repeats)

Biotech has, over its history, often succeeded in getting attention, but has had less success justifying it, leaving investors rudely awakened to its complexities.  It has continued, however, to achieve legitimately exciting medical therapeutic advances, if only as stepping stones in the right direction, like mapping the human genome, the development of polymerase chain reaction (“PCR”), and biotech-driven advances in molecular biology, immunology, gene therapy, and others, with applications ripe for exploitation in many clinical specialties, Sadly, the agonizing delay between advanced and “available now” has typically disappointed manufacturers, investors, clinicians and patients alike. CRISPR and other tools already available (see Genetic Engineering News and others) are poised to increase the expectations – and the pace toward commercialization – in biotechnology.

Vaccines and Infectious Disease: Anyone reading this who has been under a rock for lo these many years, blissfully ignorant of SARS, Ebola, Marburg, MRSA, and many other frightening acronyms besides HIV/AIDS (more than enough for us already) should emerge and witness the plethora of risks we face (and self-inflict through neglect), any one of which might ultimately overwhelm us if not medically then economically in their impacts. But capitalists (many altruistic) and others have come to the rescue with vaccines such as for malaria and dengue-fever and, even, one for HIV that is in clinicals.

Critical Mass, Synergies, and Info Tech. Biotechnology is succeeding in raising great gobs of capital (if someone has a recommended index/database on biotech funding, let me know?).  Investors appear to be forgetful increasingly confident (in the 1990s, I saw big layoffs in biotech because of ill-advised investments, but that was then…) that their money will result in approved products with protected intellectual property and adequate reimbursement and manageable costs in order to result in attractive financials. The advances in biological and medical science alone are not enough to account for this, but such advances are almost literally being catalyzed by information technologies that make important connections faster, yielding understanding and new opportunities. The net effect of individual medically-related disciplines (commercial or academic) advancing research more efficiently as a result of info tech and info sharing/synergies between disciplines is the expected burst of medical benefits ensuing from biotech. (Take a look also at Internet of DNA.)

The future of medtech demands more and better imagination

I frequently see conclusions about the the future of medtech derived by analysts who are walking backward looking at their feet — living by the tenet of “past is prologue”. This type of “foresight” presumes an unchanging set of forces, leading (at best) to a conclusion that the future will hold more of the same.

Yet, the future of medtech is dictated far more significantly not by what has already happened, or as a result of past trends continuing as future trends, but by what has not happened yet. The major thrust of any significant growth (and isn’t growth what interests us?) comes primarily from events that do not as clearly follow from past events:

  • Surgical device sales forecasts are uprooted by introduction of laparoscopy
  • Tissue engineering preempts conventional treatments in wound, orthopedics, cardiology…
  • Success in type 1 diabetes treatment will be determined by device advances as well as cell therapy advances
  • Systems biology reveals risks and opportunities previously unseen

If you view your markets myopically, then you consider your competitors to be limited to those whose products most resemble your own. If you have a long view, you consider what might be possible based on available/emerging technology to tap into untapped demand or simply create latent demand that no company has yet been sufficiently visionary or innovative to seize. What patient populations, clinical practice patterns and their trends are the pulse that you monitor (or are you even monitoring these)?  There is a gap between what is available and a whole set of patients virtually untreated, physicians unsatisfied, and third party payers struggling.  Are you an angioplasty catheter manufacturer — or a coronary artery disease solution?  Do you make devices — or outcomes?

Source: Yann Girard https://www.linkedin.com/pulse/life-explained-through-technology-yann-girard

Look at staid “device” companies like Baxter International and see that they have “biosurgery” divisions.  Look at Medtronic and appreciate that they are as sensitive to developments in glucose monitoring and insulin pump technologies as they are to the litany of cell therapy approaches under pursuit. (These companies are fundamentally aware of technology “S-curves” — see graphic at right.)

Virtually every area of current clinical practice is subject to change when considering drug/device hybrids, biomaterials, nanotechnology/MEMs devices and coatings, biotechnology, pharmaceutical (and its growing sophistication in drug development), western medicine and eastern medicine, healthcare reform, cost containment, RFIDs, 3D printing, information technology  — it is imperative to see the upside and downside of these.

These are some of the forces that less characteristic of the past that are leading to startling new success in medtech developments:

  • Materials technologies are redefining the nature and functional limits of medical devices
  • Technologies more closely aligned with cure than symptomatic treatment gain rapid acceptance
  • The practice of considering outcomes measures of highly diverse technology solutions to disease has ascended to prominence in the mindsets of healthcare systems and payers
  • The use of information technologies and cross-medical discipline initiatives enables rapid determination of likely success and failures in whole new ways

Aside from the demands for operational efficiency and managing cash flows, the success or failure of medical technology companies has become a reflection of how well these companies position themselves now and in the future with an imaginative long view. Companies must consider the revenue streams in Year 1, Year 5 and Year 10.

 

Established to emerging, commodity to advanced in wound management

Wound management is about as diverse a market as there can be in medtech. Wounds can be acute or chronic, surgically created or arising from trauma or disease, treated with technology as simple as a piece of gauze or as complex as a hyperbaric oxygen chamber or negative pressure would therapy technology.  The manufacturers range from producers of largely commodity-like dressings to devices to equipment to growth factors and other biotech products.

Simultaneously, the nature of patient populations, clinical practices, market development, economics and technology adoption vary widely around the world, resulting in considerable variation in the sales of traditional products all the way up through the most advanced products in wound management.

As an example, below are illustrations of the 2011 to 2020 forecast for the range of wound management products in the U.S. and a different set of markets, the Rest of Asia/Pacific (excluding Japan and Korea); predominantly China, India and Australia.

The distribution of product sales in wound management, on a relative basis, is very different in the U.S. than in the Rest of Asia/Pacific due in large part to the tendency for advanced technologies to be first introduced in well developed markets, like the U.S., Europe, Japan and others and later migrated to the “emerging” markets. T

The U.S. graph illustrates the decreasing/increasing share of each technology’s sales relative to all others.

Screen Shot 2014-05-20 at 3.23.43 PM

Source: MedMarket Diligence, LLC; Report #S249

For the Rest of Asia/Pacific Market, a different picture emerges, with interesting variations per product segment.

 

 

Screen Shot 2014-05-20 at 3.23.58 PM

Source: MedMarket Diligence, LLC; Report #S249

However, to put the relative differences into a meaningful context, one has to look at the absolute sales in the different markets. And, to show the very real, stark difference between the U.S. and Rest of Asia/Pacific markets for wound management products, we have plotted both on the same scale, with the max given for both as $12,000 million in sales.

 

 

Screen Shot 2014-05-20 at 3.24.16 PM

Source: MedMarket Diligence, LLC; Report #S249

Screen Shot 2014-05-20 at 3.29.56 PM

Source: MedMarket Diligence, LLC; Report #S249

Sutures, staples, clips and other wound closure still active in development

See the updated, published 2012 Report #S190, “Surgical Sealants, Glues, Sutures, Other Wound Closure and Anti-Adhesion, Worldwide Markets, 2012-2017.”

In our analyses of the market for surgical sealant, glues, wound closure, hemostasis and ant-adhesion products (Report #S180), we highlight that a major force in the development of these new products is in manufacturers driving innovation to enable the products to displace traditional wound closure products, especially sutures, staples and clips.

Given the size of this “mechanical closure” market, at over $5 billion annually, manufacturers in this space are not idly standing by while novel wound closure technologies poach their caseload.  A healthy number of companies are actively developing and marketing novel wound closure products that still fall in this traditional category of wound closure:

Source: MedMarket Diligence, LLC; Report #S180.

 

Companies represented here (many involved in development of multiple wound closure product types) include: 3M, Abbott Vascular, Angiotech Pharmaceuticals, ArthroCare , B. Braun/Aesculap, BSN Medical, Cardiva Medical, Covidien, CSMG Technologies (Live Tissue Connect), Incisive Surgical, Innovasa, Johnson & Johnson (Ethicon), Kinetic Concepts, Morris Innovative, NeatStitch, Resorba, St. Jude Medical, Synovis Life Technologies, Teleflex Medical, Wound Care Technologies, and Zimmer.

This does not include the companies active in the area of medical/surgical tapes in a range of types; fabric, film, island, bandage, impregnated and others.

Cell Therapy and Cardiovascular Disease

Cell therapy is defined as a process whereby new cells are introduced into tissue as a method of treating disease; the process may or may not include gene therapy. Forms of cell therapy can include: transplantation of autologous (from the patient) or allogeneic (from a donor) stem cells , transplantation of mature, functional cells, application of modified human cells used to produce a needed substance, xenotransplantation of non-human cells used to produce a needed substance, and transplantation of transdifferentiated cells derived from the patient’s differentiated cells.

Once considered a segment of biomaterial technologies, tissue engineering has evolved into its own category and now comprises a combination of cells, engineering and suitable biochemical and physiochemical factors to improve or replace biological functions. These include ways to repair or replace human tissue with applications in nearly every medical specialty. Regenerative medicine is often synonymous with tissue engineering but usually focuses on the use of stem cells.

Tissue engineering and cell therapy may be considered as comprising bioengineered products that are themselves cells or are actively stimulating cell growth or regeneration. These often comprise a combination of biotechnology, medical device and pharmaceutical technologies.

Researchers have been examining tissue engineering and cell therapy for roughly 30 years. While some products in some specialties (such as wound care) have reached market, many others are still in research and development stages. In recent years, large pharmaceutical and medical device companies have provided funding for smaller biotech companies in the hopes that some of these products and therapies will achieve a highly profitable, commercial status. In addition, some companies have been acquired by larger medical device and pharmaceutical companies looking to bring these technologies under their corporate umbrellas. Many of the remaining smaller companies received millions of privately funded dollars per year in research and development. In many cases it takes at least ten years to bring a product to the point where human clinical trials may be conducted. Because of the large amounts of capital to achieve this, several companies have presented promising technologies only to close their doors and/or sell the technology to a larger company due to lack of funds.

The goal of stem cell research is to develop therapies to treat human disease through methods other than medication. Key aspects of this research are to examine basic mechanisms of the cell cycle (including the expression of genes during the formation of embryos) as well as specialization and differentiation into human tissue, how and when the differentiation takes place and how differentiated cells may be coaxed to differentiate into a specific type of cell. In the differentiation process, stem cells are signaled to become a specific, specialized type of cell when internal signals controlled by a cell’s genes are interspersed across long strands of DNA and carry coded instructions for all the structures and functions of a cell. In addition, cell differentiation may be caused externally by use of chemicals secreted by other cells, physical contact with neighboring cells and certain molecules in the microenvironment.

The end goal of stem cell research is to develop therapies that will allow the repair or reversal of diseases that previously were largely untreatable or incurable. These therapies include treatment of neurological conditions such as Alzheimer’s and Parkinson’s, repair or replacement of damaged organs such as the heart or liver, the growth of implants from autologous cells, and even regeneration of lost digits or limbs.

In a developing human embryo, a specific layer of cells normally become precursor cells to cells found only in the central nervous system or the digestive system or the skin, depending on the cell layer and the elements of the embryo that direct cell differentiation. Once differentiated, many of these cells can only become one kind of cell. However, researchers have discovered that adult body cells exist that are either stem cells or can be coaxed to become stem cells that have the ability to become virtually any type of human cell, thus paving the way to engineer adult stem cell that can bring about repair or regeneration of tissues or the reversal of previously incurable diseases.

Another unique characteristic of stem cells is that they are capable of self-division and self-renewal over long periods of time. Unlike muscle, blood or nerve cells, stem cells can proliferate many times. When exposed to ideal conditions in the laboratory, a relatively small sample of stem cells can eventually yield millions of cells.

There are five primary types of stem cells: totipotent early embryonic cells (which can differentiate into any kind of human cell); pluripotent blastocyst embryonic stem cells, which are found in an embryo seven days after fertilization and can become almost any kind of cell in the body; fetal stem cells, which appear after the eighth week of development; multipotent umbilical cord stem cells, which can only differentiate into a limited number of cell types; and unspecialized adult stem cells, which exist in already developed tissue (commonly nerves, blood, skin, bone and muscle) of any person after birth.

One of the key methods by which to evaluate the potential market opportunities in the early stages of an industry such as tissue engineering and cellular therapy is to look at the number of current procedures that could possibly be augmented or replaced by the new technologies. In the sections that follow, we review the major areas of transplantation and estimate the clinical caseloads that reflect potential uses of tissue engineering. It should be kept in mind that it is highly unlikely that tissue engineering will replace 100% of these particular procedures, even after years of clinical usage. There will always be patients for whom certain procedures are inappropriate; other procedures may not be fully covered by insurance and hence will only be used by those patients who can afford them. Transplant of cadaver organs is likely to continue as long as these organs are available and free of disease, and the cost of transplantation is equal to or less than the cost of tissue engineering. The latter, of course, reflects a key pricing strategy for tissue engineering and cellular therapy. The clinical caseloads for the conditions addressed are enormous, hence, even with the caveats, the potential markets for TE and cell therapy are extremely significant. The competition within the infant industry is fierce, with reason.

Cell Therapy in Cardiovascular Disease

The term “cardiovascular disease” encompasses as large number of diseases of the heart and vasculature. There are an estimated 70 million Americans who could benefit from cell-based therapies for cardiovascular applications. The prevalence and incidence of cardiovascular disease in the United States are shown in the following exhibits.

Source: MedMarket Diligence Report #S520: Tissue Engineering, Cell Therapy and Transplantation: Products, Technologies & Market Opportunities, Worldwide, 2009-2018

Biologics in the Treatment of Spine Disorders and Trauma

The bone graft and bone substitute market has grown at a solid rate since 2000, and, despite current economic restrictions, will continue to grow throughout the forecast period. Some of the drivers of this market include the need to increase fusion rates, growth in spine fusion procedure volumes, an increased number of bone products, and the introduction of growth factors. The aggregate date below represents sales from 2010 to 2020 of allografts, demineralized bone matrix (DBM) and bone morphogenetic proteins (BMPs) in treatment of spine-related disorders and trauma.

Prices are under pressure and declining, but demand is still positive and driving growth.

Source: Worldwide Spine Surgery: Products, Technologies, Markets and Opportunities 2010-2020 (July 2011).

Cures, miracle solutions and cynicism about biotech

A development emerging out of Tel Aviv’s Sackler School of Medicine, TAU Grows New Blood Vessels To Combat Heart Disease, centers on the ability of injecting a specific protein into oxygen-starved tissue to cause formation of new blood vessels, a development that bodes potential to treat ischemic heart disease, among others.

Perhaps it is due to the fact that I came from the biotech industry in the ’80s, when many fundamental advances were being made in molecular biology, genetics, cell biology and other biological disciplines, these advances being in our understanding of, and our ability to manipulate, such biological systems.  It was during this time that wildly optimistic leaps of judgment were made by entrepreneurs and investors regarding the commercial potential of these advances.  To be clear, many of the leaps in judgment were not in fact inaccurate. The actual fault lay in the presumption of the size of the technical hurdles in achieving that potential or, more accurately, the presumption of our ability to surmount those hurdles.

The result was that vast sums of money have been poured into the commercial ventures of biotech visionaries and, while perhaps a considerable amount of this investment has indeed advanced the science and industry of biotechnology, a drastically smaller portion of that investment can lay claim to realizing the commercial potential as originally foreseen.

History tends to repeat itself.  What transpired in the ’80s has occurred time and again over the past 25 years.  With the exception of the Genentechs, the Amgens, the Chirons and a few others, many companies have been formed around words like "groundbreaking", "landmark" and other superlatives of scientific advance in biology, only to fizzle in the hard reality of turning potential into reality.

A few things to keep in mind. First, I am eminently optimistic about biotech as an industry.  Having come from a background in molecular biology and having worked at a Boston-based biotech, I have a pretty grounded view of what is indeed possible.   Second, I have an even higher sense of optimism about the pace at which scientific discoveries are made and the pace at which they are being turned into practical, if not commercial, application.  Lastly, I daily, weekly and monthly review many, many, many journal abstracts, patent applications, patent awards and other developments in medicine, giving me a well maintained radar of what is out there, what succeeds and what is simply wishful thinking.

Where my cynicism is triggered is the point at which a scientific discovery is stated in almost no uncertain terms to mean a radical change in the clinical practice of medicine and, further, that this advance is so tremendous in terms of its ability to more effectively treat a large patient population and, by extension, utterly demand investment in such a profoundly wonderful venture.  That cynicism is even more strongly stimulated when those scientists making the scientific discoveries are the very same individuals who are denoting the vast commercial potential to be realized.  Snake oil.

So, to make a long story short, I see a development announced that will mean the end to many heart surgeries.  I am utterly optimistic, since I know that angiogenesis (formation of new blood vessels) has been demonstrated previously.  I then see phrases like, "…our technology promises…" and "…if investment goals are met…".

Been there.  Done that.  But still, we’ll see…

Where to invest? How about in innovation?

The recent formation of an index focused on health product innovators illustrates both the upside and the stability of the medtech arena. 

The index includes companies which get approvals for drugs or biological agents classified as new chemical entities (i.e. excluding all new formulations of existing drugs, generic drugs, and label extensions for existing products). Also, companies which receive original PMA approvals for new medical devices are included in the index, excluding the less rigorous and more numerous 510(k) applications.

The goal of the index is to track the performance of companies which are developing innovative new drugs and medical devices to see whether their investment in R&D pays off in the form of better stock price performance compared to benchmark ETFs for pharma, biotech, medical devices, and the overall healthcare sector.

ETF Innovators

 

Medical devices versus nature

If one is in the position of needing to look to the future of medical technology to identify opportunities or predict challenges in the market (and who in this industry is not?), then it is hard to not factor into the analysis two very different current trends and play them out toward the resulting future market impact. One trend is the biotech-driven trend of elucidating natural processes of health, disease and healing in order to exploit understanding of the natural sciences to solve medical problems. The other trend is the technology-centric trend of developing hardware, largely surgical or at least interventional technology, that may dramatically achieve better surgical/interventional endpoints. To (over)simplify, one could say this is the biotech versus device polemic, but that really does simplify the dynamics too far, suggesting there is ultimately an either/or conclusion, which is false.

A group at Harvard-MIT earlier this year reported in the Proceedings of the National Academy of Sciences on a flexible, waterproof and even biodegradable bandage based on the sticky feet of the gecko. The lesson of the gecko is that the gecko’s stickiness comes from nanoscale fibers or "pillars" that increase the surface adhesion, which the Harvard-MIT team mimicked in the construction of the tape with nanostructures in the surface. Now, while this does not really represent a biological solution (such as the protein-based glue used by mussels to attach to surfaces; see also Report #S175), the study of natural processes revealed a solution that could be modeled in medical technology. This points up the huge number of opportunities that reside in nature directly (e.g., mussel glue) or indirectly (nanostructured adhesive based on the gecko). After millions and millions of years of evolution that has produced survival advantage for the natural world, it would almost be viewed as foolish to pursue solutions to medical problems without considering that those problems have already been solved, somewhere, in nature. Some scientists are convinced, for example, that the biological diversity resident in the Amazon rain forest holds cures for cancer and many other diseases.

At the other end of the spectrum is technology like the Da Vinci (Intuitive Surgical, Inc.), a four-arm, flexible wrist robot on which are mounted miniaturized tools and cameras controlled by a surgeon, at a cost of $1.4 million, not including the cost of parts, maintenance and training. The system enhance the precision of surgeons performing prostate surgery and is also being adapted to the performance of hysterectomies, fibroid removal (and other gyn procedures), heart valve replacement and kidney surgery. The system enable a level of control that is simply not possible by the freehand surgeon, which enables much more challenging procedures, ones that may heretofore have been inoperable or simply not possible without causing unacceptably high complications. Intuitive’s Da Vinci is not alone in this trend. Accuray has developed its CyberKnife for its ability to precisely attack tumors without surgery. There are also complex systems under development by Hansen Medical and Stereotaxis.

Certainly, the emergence of medical/surgical robotics can be viewed analogously, albeit simplistically, to the advent of laparoscopy, with its technology-intensive approach that minimizes trauma to the patient. But, the several-thousand dollar investment of laparoscopy hardly compares to $1.4 million (plus) for Da Vinci. Nonetheless, the facts of Da Vinci’s market success to date have been clear, since Intuitive has been exceeding Wall Street’s expectations for sales, revenues, etc., all of which is nothing less than remarkable in this era of cost containment.

What do these trends say for future market opportunities? The "biotech" trend tells us that there are many opportunities yet to be discovered based on the amount of disease (and even trauma) in the world and the lack of cures for them that are not "perfect" — reversing the disease condition and restoring health without the smallest complication. Of course, there also remain a huge number of "nearly perfect" solutions, or even less perfect ones that hold potential due to the fact that they provide even the most marginal advantage over existing therapies, if such exist at all for the treatment of specific diseases.

The "technology-intensive" trend suggests that the limitation of what we can achieve is not dictated by our knowledge of natural systems but is determined only by the apparent limits of our imagination and technology development well outside of healthcare (e.g., robotics are not inherently medical), which will include materials sciences, information technology and the stunning array of technology hybrids that can be constructed to achieve specific outcomes (RFID-embedded surgical instruments, ingestible "pillcams", etc.).

The two schools of thought are not mutually exclusive, by any stretch of the imagination. In fact, there are are enormous opportunities in the marriage of the two. The mandate for medtech manufacturers seems to be then that they should, on the one hand, come to as thorough an understanding possible of the natural biological processes associated with the disease or disorder of interest and, on the other hand, imagine and apply any and all technology, regardless of scientific discipline, that will result in an improved outcome for the patient. With the rapid growth in our understanding of the complex etiologies of disease and with the spectrum of technologies that can be constructed to serve specific functions, the only limitations appear to be imagination and reimbursement, and with Intuitive Surgical’s market success, one would wonder if the latter is even a problem.