Global Medical Device Market Outlook, 2018 · Medical Device Industry: Percent Sales by Segment, Global, 2018 Medical Device Industry: Percent Sales by Region, Global, ... Ambulatory

Global Medical Device Market

Outlook, 2018

May 2018

Presented at AusMedTech

Global Healthcare Revenue by Sector in 2017 and 2018

2017 2018 Growth Rate

Total Healthcare Industry

($ Billion)1,768.61 1,853.83 4.82%

1,195

371

29 65 108

1,246

390

31 72 115

0

500

1,000

1,500

Reve

nu

e (

$ B

illi

on

)

Healthcare ITIn-Vitro

Diagnostics

Medical

Technologies

Medical Imaging

Equipment

Pharma and

Biotech

2018

2017

Sector

Growth Rate

(2017–2018)4.3% 5.2% 4.4% 10.0% 6.4%

Note: All figures are rounded. The base year is 2017. Source: Frost & Sullivan

Total Healthcare Industry: Revenue Forecast by Sector, Global, 2017 and 2018

Global Healthcare Revenue by Region in 2017 and 2018

North

America38.5%

714.52 Bn

3.1%

2018 Percent of total global share Projected 2018 market size in $Billion 2018 Projected Growth Rate

Latin

America7.4%

137.08 Bn

10.9%

Europe22.8%

422.04 Bn

1.0%

Asia-Pacific(excluding Japan)

18.5%

342.39 Bn

11.1%

Japan9.4%

174.40 Bn

2.3%Row3.4%

63.40 Bn

13.8%


Total Healthcare Industry: Revenue Forecast by Region, Global, 2017–2018

4

Global Medical Device Industry Market Snapshot, 2017–

2018Medical Device Industry: Percent Sales by Segment, Global,

2018

Medical Device Industry: Percent Sales by Region, Global, 2018

*Others include durable medical equipment, hospital supplies, consumables, and

sterilization and decontamination equipment. Note: All figures are rounded. The base year is 2017. Source: Frost & Sullivan

Medical Device Industry: Revenue Forecast, Global, 2017–2018

2017 2018

Growth Rate: 5.2%

$370.8 B $390.1 B

Rev

en

ue (

$

Billio

n)

Others*, 28.1%

Ortho, 13.2%

Minimally Invasive, 11.6%

Cardio, 9.5%

Ophthalmology, 8.5%

Wound Care, 5.7%

Patient Monitoring, 5.5%

Audiology, 4.7%

Respiratory - Anesthesia, 4.7%

Neuro, 2.8%

Uro-Gyno, 1.9% Aesthetics, 1.9%Robotics-Navigation, 1.9%

United States39.0%

Japan8.9%

Germany9.9%

China8.1%

UK4.0%

France4.0%

Russia2.1%

Spain2.0%

Brazil1.1%

India1.2%

ROW19.8%

5

Global Medical Device Industry—Top 3 Segments

Snapshot, 2017–2018


Medical Device Industry: Top 3 Segments Revenue and Growth Forecast, Global, 2017–2018

49.0 42.0 35.051.3 45.3 36.90.0

20.0

40.0

60.0

80.0

Orthopedic Endoscopy Cardiac2017 2018

Rev

en

ue (

$

Billio

n)

Medical Device Industry: Top 3 Segments Revenue Share By Region, Global, 2018

Orthopaedic Endoscopy Cardiac

United States 62.5% 44.7% 40.1%

Europe 22.5% 23.8% 28.1%

Asia Pacific 11.0% 19.5% 24.0%

Rest of World 4.0% 12.0% 7.8%

Equipment/ Implants

Consumables/Accessories

Services

Revenue Split 60% 35% >5%

Growth Rate 2-5% 4-8% 10-15%

Medical Device Industry: Revenue Split by Segments and Growth Potential, 2018

Product

Incremen

tal

Products

Services

Product

SupplierService

Provider

Data

Management

Analytics

Product

Supplier

Solution

Provider

Product Product Product

Analysis of M&A Deals in Global Medical Device Industry,

2017

Where are Companies Placing Their Bets?

• Business expansion, increasing market share, market consolidation, and technology expansion to leverage first-mover

advantage are the main reasons driving the acquisitions for tier-1 companies.

• Growth by acquisition is still a medical device company’s go-to strategy, one trend that is expected to remain stable over the

next 3 to 5 years. In-house R&D investments have declined in 2017, globally.

In the recent years five

out of the top 30

companies have been

acquired hence

consolidating the top 10

players with 30- 40 percent

of the global medical

device market.

M&A in 2017 in Top 10 medical

device companies was driven by

Product portfolio strengthening.

Abbott acquiring St Jude medical to

strengthen its Cardiac portfolio and

Medtronic acquiring Crospon to

strengthen its Endoscopy portfolio

Notable Consolidation Mega Merger Notable Company

Most notable is Essilor's merger

with Luxottica Group, owner of

the Ray-Ban and Oakley brands,

in a $49 billion deal that would

create a giant in the eyewear

industry

Transformation in the Medical Device Industry Ecosystem—2018 Growth Stars

On Body In-Home Community In-Clinic In-Hospital

Key Areas of Activity in 2018

Wearables

Smart

Devices

Peripherals

Next

generation

Implants

Home Medical

Devices

Digital

Assistants

Consulting/

Coaching

Activity

Monitoring

Mobility

Automated

Kiosks

Supply Chain

Logistics

Emergency

Response

Intelligence

Lab-on-a Chip

Care Co-

ordination

Technologies

Ambulatory

Therapies

Connected

Equipment

Patient

Surveillance

Smart OR

Real-time

Location System

Analytics/

Informatics

Storage/

Database

Management

Cyber-

Security

Machine

Learning

Inter-

operability

Decision

Support

Source: Frost & Sullivan

Handheld

Medical

Technologies

Key Trends Driving MedTech Business Model Shift

Factors Driving Business Model Transformation

From To Objective

Contract ModelFee for Service

(Volume)Outcome Based

(Value)

Growing importance of performance metrics tied to reimbursement • Opportunities to support providers in extending care across the continuum and

population health management (PHM) • Increased focus on patient/consumer and patient satisfaction

Target CustomerPhysician

(Clinical Value)

Physician-led GPOs(Clinical and Economic

Value)

Increasing centralization of hospital purchasing process• Hospital consolidation - Shift to fewer decision makers• More standardization and increasing importance of administrators and economic

buyers

Portfolio Strategy Diversified TargetedIncreasing demand for solutions versus stand-alone products • Growing provider desire for fewer and deeper partnerships• Shifting market focus from medical devices to end-to-end digital health solutions

Care DeliveryInpatient

CareOutpatient

(Pre and Post Care)

Shifting patient mix from inpatient to outpatient• Technologies (e.g. mHealth, RPM, Homecare) and reimbursement promoting lower

acuity care settings• Providers and payers need to manage cost and justify value across the care

continuum


Connected Devices Hospital Patient Monitoring Digitizing Cancer Intervention

• Connected devices and those

enabling healthy living and aging are

set for double digit growth and

increased global adoption in 2018.

• The cardiac sector will lead the way

in the adoption of connected devices

to support the care continuum.

• "Precision in Care" would be the

focus for cancer therapy

manufacturers with investments in

digitization of therapies, improving

visualization and surgical

techniques, and workflow

integration solutions.

• Analytics and real-time monitoring

capabilities would be the value

proposition of patient monitoring

companies, moving forward.

• Hospital-centric patient monitoring

will be driven by the shift to wireless

real-time monitoring, enabling the

clinical community to drive greater

efficiencies.

Image Source: Thinkstock, Frost Database

Medical Technologies Market—Key Growth

Opportunities


AI in

Imaging

Portable and Handheld

Ultrasound

Digital

Tomosynthesis

• AI will move mainstream in the

imaging diagnostics segment,

leveraging advanced/ deep learning

capabilities to improve screening

outcomes.

• Operationalizing AI platforms across

medical imaging workflows would

result in 10–15% productivity gains

for radiologists in the next 2-3 years.

• Digital Tomosynthesis continues to

evolve as a more effective diagnostic tool

in breast imaging and digital x-ray

technologies, and is expected to spur

market growth in the next 2-3 years.

• With x-ray technologies, Digital Chest

Tomosynthesis (DCT) is also proving to

be more effective at guiding clinical

decision making around detecting lung

nodules.

• High growth opportunities in the

ultrasound imaging category with

capabilities beyond established

clinical segments.

• Key areas of growth include: POC,

primary care, musculoskeletal,

emergency medicine, anesthesia,

pain management, and fusion

imaging.


Medical Imaging Equipment Market—Key Growth

Opportunities


Cloud Solutions for

Healthcare

Cognitive

Computing

Care

Management

• Increasing volume and complexity of

healthcare data underscore the potential

to develop new and innovative solutions

that leverage cloud platforms.

• Adoption of cloud-based clinical

applications including EMRs, HIE, PHM

solutions and teleradiology will peak in

the next 3-5 years but the game-

changer will be real-world data.

collaborations.

• Solutions that allow management,

integration and analytics of genomics,

medical records and population health

data will enable Precision Medicine.

• Precision Medicine solutions will play a

pivotal role in not just drug discovery

but, also, improvements in care quality,

outcomes and chronic disease

management.

• Meaningful cognitive solutions have an

estimated revenue potential of over $40

billion by 2025. While the benefits

accrued by various healthcare industry

stakeholders through cognitive

computing could be well over $150

billion by that time.

• The data deluge in healthcare is paving

the way towards analyzing information

and deriving “value” for stakeholders.

Note: EMR—Electronic Medical Record, HIE—Health Information Exchange, PHM—Population Health Management.


2018 Healthcare IT Market—Key Growth Opportunities


Medical Technologies Sector Companies to Watch—

2018

Brief Summary:

Provides a continuous flash glucose

monitoring system called Libre, at 1/4 the

cost of existing systems, FDA approved in

September 2017 and received

reimbursement approval in most European

countries and Japan at the end of 2016

and 2017.

Unique Value Proposition:

Approval in CE and Japan generated

hundred thousands of unit sales, primarily

with out-of-pocket expenditure. FDA

approval and reimbursement coverage

across many countries is likely to double

unit sales in the next 2 years.

Brief Summary:

With the FDA approval of Impella RP® for

Right Heart Failure in 2017 and with its

Impella series of heart pumps, Abiomed is

the only solution provider of percutaneous

temporary ventricular support devices for

right heart failure and cardiogenic shock

therapy.


With the expansion of product sales to

international markets, the company is

expected to grow at a higher rate and

FY2018 revenues are projected to grow by

more than 25%, making it one of the fastest

growing cardiovascular device companies in

the last 5 years.

Brief Summary:

The company’s advanced wound care

business, comprising 26% of its 2016

revenue of $4.7 billion, has been stagnating

over the last 5 years. Smith & Nephew

acquired worldwide distribution rights for

MolecuLight i:X, an innovative digital wound

assessment device.


MolecuLight i:X expands the company’s

footprint from wound therapeutics into the

digital wound imaging and diagnostics space.

Unmatched product synergies across the

wound care continuum offers healthcare cost

savings and high topline growth opportunities.

It is a win-win value proposition, offering

significant scale and faster growth potential for

MolecuLight.

Continuous Glucose Monitoring

Abbott Laboratories

Miniaturized Circulatory

Support Devices

Abiomed

Digital Wound Management Solution


Medical Imaging Sector Companies to Watch—2018

Brief Summary:

Arterys uses deep learning in it’s cardio AI, lung AI

and liver AI platforms in order to improve the

imaging accuracy of its cardiac MRI scans, provide

single click automated volumetric segmentation of

lung nodules and automated segmentation of liver

lesions. Arterys received FDA approval for its

cloud-based Cardio DL platform in January 2017.


GE Healthcare’s Vios Works solution is powered

by Arterys. The company has also entered into a

partnership with Siemens Healthineers. In

November 2017, the company raised USD 30

million in Series B funding. Artery’s portfolio also

includes the FDA approved MICA platform, an AI

platform for medical imaging analytics, which

includes Arterys’ PHI Service for data security.

Brief Summary:

Butterfly Networks ushers in a new era of high-

performance, hand-held ultrasound systems. It

has developed the world's first Ultrasound-on-

a-Chip based imaging system (Butterfly iQ® for

iPhone) by combining almost 10,000 sensors,

covering across 13 clinical applications, with a

single transducer probe.


A unique blend of affordability (at less than $2k),

diagnostic versatility, and assistive intelligence

makes the Butterfly iQ® the next ‘in’ stethoscope

in daily practices. It is expected to play a pivotal

role in the diagnosis of pneumonia and women’s

health during child birth.

Brief Summary:

As an OEM dedicated to women’s care, Hologic

continues to build on its product portfolio to address

the continuum of breast care through early

detection, diagnosis, surgical treatment planning,

and image-guided procedures.

In ECR’17, Hologic introduced its new dedicated

prone stereotactic biopsy system, ‘Affirm’ which

delivers the capability of performing both 2D and 3D

tomosynthesis-guided procedures on a single

platform.

Unique Value Proposition: Transformation from

product-centric to ‘customer-centric’, together with

an established sales and distribution network for

women's health, as well as extensive relationships

with clinical labs and OB/GYN channels, will

accelerate Hologic’s customer penetration and

retention.

Artificial Intelligence Portable/Hand-held Ultrasound Digital Tomosynthesis


Healthcare IT Sector Companies to Watch—2018

Technology Platforms & Services

Brief Summary: The online retail

and services giant announced a

$14 billion acquisition of Whole

Foods and a partnership with Cerner to enter

the PHM market, while Amazon Web

services continues to be a leader in the

healthcare cloud computing market.

Internet ConglomerateCognitive Intelligence Platform

IBM Watson

Unique Value Proposition: Amazon’s products and technologies have a strong consumer-centric market presence. Its cloud platforms and e-commerce business models have the potential to create truly patient-centric clinical and non-clinical health services, ranging from wellness advisory and disease management to retail sales and clinical intervention.

Brief Summary: Despite some negative publicity, IBM Watson continued to see growth in revenues and client base from the healthcare industry. Watson for Oncology is expected to end the year with over 120 hospital clients, while partnerships with other market participants like Sanofi, Medtronic and CDC developed further.

Unique Value Proposition: Cloud+Cognitive is an integrated value proposition that IBM is bringing to every client engagement. The

powerful combination promises to deliver

optimum ROIs on the latest technologies,

including IoT and blockchain for clients.

Brief Summary: In Dec 2017, Alphabet announced a number of new services from various subsidiaries (DeepMind, Verily and Google) to be launched in the near future. Combined with recent investments in start-ups throughout 2017, the company promises to expand its play in healthcare in 2018.

Unique Value Proposition: Google’s consumer penetration of over a billion users globally and Alphabet’s technical brilliance across all its businesses has the power to create disruptive healthcare IT solutions such as, for instance, the highly accurate, open source platform for gene sequencing, DeepVariant.


6 out of 10 new products positioned today to hospitals are a solution that improves outcomes or efficiency

Fem tech and Women’s Health would witness great investments and open markets in the US and Europe.

Increase in corporate wellness is likely to provide newer opportunities for Payors and OEMs

80% of the Top 25 Medical Device companies have some form of service portfolio and have strengthened the same to grow significantly from 2018.

Risk sharing, ecommerce and product digitization are business

model to drive double digit growth in 2018

16

2

34

5

Top 6 Transformational Shifts Impacting the Medical Device Industry in 2018“Patient Centricity” will be the key driving force for the growth of medical devices in 2018 and beyond.

Source: ORC International, Frost & Sullivan

2018 will witness immense growth in the secondary portfolios of the top 10 Med tech companies, due to stabilization and successful integration of their M&As since 2016.

What opportunities lie within the incorporation of advanced technologies,

such as artificial intelligence, Big Data analytics, and cloud computing?

What are the keys to monetizing unmet healthcare needs? What

are the opportunities tied to X-as-a-Service business models?

How do Smart Hospitals affect traditional healthcare vendors? What is

the size of the growth opportunities for vendors until 2025?

What are the current trends related to cybersecurity for medical

technologies? Which devices and systems are most vulnerable?

2018 Global

Healthcare

Market

Outlook

How does the new ecosystem of digital solution providers look like for remote

or virtual clinical trials?

Concluding Thoughts


Documents

Global Medical Device Market Outlook, 2018 · Medical Device Industry: Percent Sales by Segment, Global, 2018 Medical Device Industry: Percent Sales by Region, Global, ... Ambulatory