As data personalizes medtech, how will you serve tomorrow’s consumer? Pulse of the industry 2019 ey.com/lifesciences Contents
Pulse of the industry 2019 Contents
1 Key findings
3 Medtech in 2019
15 Robotic surgery: an emerging battleground
19 Acquisitions and innovations in the Asia-Pacific market
23 A secure ecosystem for data exchange
27 Securing the supply chain
31 Securing value
37 Guest perspectives Kevin Lobo, Chairman and Chief Executive Officer, Stryker Chairman, AdvaMed Board of Directors John Liddicoat, M.D., Executive Vice President and President, Americas Region, Medtronic Dr. Mark Boxer, Executive Vice President and Global Chief Information Officer, Cigna Susan Tousi, Senior Vice President, Product Development, Illumina Abdul Hamid Halabi, Director of Healthcare, NVIDIA Wende Hutton, General Partner, Canaan Partners
49 Databook 67 Scope of this report 69 Contacts 71 Acknowledgments
Pulse of the industry 2019 Key findings
Pamela Spence EY Global Health Sciences & Wellness Leader [email protected]
James Welch EY Global Medical Technology Leader [email protected]
John Babitt Life Sciences Transaction Advisory Services Partner, US Ernst & Young LLP [email protected]
Connect with us! Twitter: @EY_LifeSciences ey.com/lifesciences
1 | Pulse of the industry 2019 Metrics suggest the medical technology • Revenue grew 7% year over year, but the annual industry is strong, but warning growth rate has yet to rebound to pre-2008 levels. signs remain. • Robust R&D spending demonstrates a commitment to innovation, but capital allocation trends suggest there is still more focus on near- term growth via share repurchases.
Healthy IPO and venture financing totals • The robotic surgery market attracted major were a positive, but a two-year decline M&A interest as buyers invested more than in total financing may signal the public US$6 billion on new platforms. market’s declining appetite for medtech. • Non-imaging diagnostics companies outpaced The total value of M&A increased more the broader industry in both revenue growth than 50%, but average deal values fell and share of early-stage venture financing, as buyers outside the sector became underscoring the technology’s importance for increasingly prominent. Robotic surgery, personalized medtech innovation. diagnostics and artificial intelligence (AI) • AI remains a top area of innovation, with at least provide signposts to how medtechs will 33 algorithms winning US regulatory approval create value in the future. since the beginning of 2018.
But for long-term success in a • With health data breaches on the rise, medtechs data-driven future, medtech must must develop secure data ecosystems in which address some key challenges. connected devices can easily exchange and use data.
• As care shifts from traditional settings, medtechs needs to develop faster, more flexible and multidirectional supply chains that meet the real needs of its customers.
• As new entrants play a more important role in care delivery, medtechs must invest in data-driven, value-based care approaches.
• To thrive in the shifting health care environment, medtechs need to adapt their business models, first determining who is the customer they are best-placed to serve and what data are required to drive maximum value.
Pulse of the industry 2019 — Key findings | 2 As technologies converge, “medtech can be at the center of a revolution in health care.
3 | Pulse of the industry 2019 — Medtech in 2019 Medtech in
2019Medtech is not in crisis in 2019, but neither is it ready for a future where care is decentralized, and platform participation is directly linked to value creation. In the future, that value will be driven by the personalized, patient-centered care models that empowered patient- consumers demand. Delivering this will require medtech to work outside the comfort zones of its traditional business models. It will need devices to work interoperably and securely, connecting together to capture and analyze data in real time, and deliver, via agile, data-driven supply chains, better interventions and care management. Achieving this transformation can finally bring the better outcomes needed both by patients and, in an increasingly value-based payment environment, by the industry itself.
But medtech isn’t there yet. And valuations are also robust: Nevertheless, the industry continues medtech’s cumulative public valuation to grow: in 2018 its collective revenues rose 38% between 1 January 2018 increased by 7% to US$407.2 billion, and 31 July 2019, far outpacing the medtech’s third consecutive year of broader life sciences industry (see growth, and its highest revenue total “Databook”). Investors still see medtech ever (see Figure 1). Net income also as less vulnerable than pharma to the increased, mainly due to tax benefits headwinds of political controversies to major companies. about product pricing. Perhaps investors also recognize that medical devices’ intimate, ongoing relationship
Pulse of the industry 2019 — Medtech in 2019 | 4 Figure 1: US and European medtech public company revenues
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5 | Pulse of the industry 2019 — Medtech in 2019 Figure 2. Medtech’s public company performance pre- and post-financial crisis
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oftentimes working through more valve repair device that has driven up for target companies. M&A spending informal and creative partnerships revenues for the company’s structural increased in the 12 months ending with companies offering skills in, for heart franchise and initiated a surge 30 June 2019, but most of the example, digital and data technologies. in acquisitions and investments in this difference comes from a small number space. But advances of this scale in of megadeals (absent last year — see Nevertheless, the industry’s willingness traditional device areas are limited. Figure 4). Strip these out, and the total to return cash to shareholders still value of M&A is similar, albeit spread seems symptomatic of uncertainty In addition, such innovation green fields over a much larger number of deals. about how to invest for growth. There don’t remain green for very long due to That means deals are getting smaller, are few billion-dollar opportunities in intense competition. This has recently with medtechs prioritizing tuck-ins and traditional medtech innovation in 2019; been well demonstrated by robotic portfolio optimization, rather than bold as Wende Hutton of Canaan Partners surgery platforms, where Intuitive has or transformative deals. observes, “US$500 million–US$1 validated the concept and medtech’s billion revenue opportunities are few bigger players are now acquiring The caution around unproven new and far between” in medtech, and the technologies that make them serious technologies continues to hurt the investment opportunity presented by competitors (see “Robotic surgery: an start-up companies that provide the the sector “pales in comparison emerging battleground”). traditional fuel for medtech innovation. to biopharma.” In the current M&A climate, many With clarity on the next big device must win reimbursement before they There are still opportunities in innovation lacking, medtech companies can make an exit. And though venture medtech. Witness Abbott’s significant are cautious about acquisitions, capital continues to flow into medtech, breakthrough with MitraClip, its mitral especially given the strong valuations overall industry financing levels
Pulse of the industry 2019 — Medtech in 2019 | 6 Figure 3. Cash returned to shareholders rises
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Source: EY, Capital IQ, company financial statement data. declined for the second year running in as a true partner that offers ongoing capabilities that will allow it to enter 2018 (see “Data appendix”). This slight collaboration. As Chelsey Berstler, a data-driven, personalized new era. contraction in raised capital mirrors Vice President of Supply Chain at As Kevin Lobo, Chairman and Chief the drop in new approvals reaching the UnitedHealthcare Global, observes, Executive Officer, Stryker, says in market this year via the U.S. Food & “there is a long history between his guest perspective, “we are at the Drug Administration’s PMA and 510(k) providers and industry supply partners beginning of a digital transformation approval pathways (Figure 5). of, sometimes, bad-faith negotiating, of health care. Data-driven medical price gouging and generally not devices will be at the forefront of that In the meantime, stakeholders who acting as partners. We are working transformation,” working to deliver traditionally represent the industry’s to change that.” “whole person care” to patient- primary customers are struggling. consumers (see “The journey so far With payers cutting reimbursement As for the ultimate end-users, medtech for medtech — and the road ahead”). to providers, hospital networks spend has yet to make the move toward Already, and despite the generally cautiously and resent the industry’s regarding patient-consumers as its real conservative activity of the medtech ongoing efforts to upsell rather than customers: its efforts are still focused industry in the past year, we can see deliver value. In short, medtech’s on provider systems. Yet medtech is some indications of that transformation stakeholders don’t see the industry beginning to acquire the tools and beginning to take place.
7 | Pulse of the industry 2019 — Medtech in 2019 Figure 4. M&As in the US and Europe by year
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Figure 5. U.S. Food & Drug Administration medical device approvals
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ource: website Hal year 2 19 ata throu h 3 une is e tra olate throu h 31 ece ber Pulse of the industry 2019 — Medtech in 2019 | 8 What’s next? Signposts dispersed portfolios, across a range of the most valuable product. That stage financial metrics (see the 2019 EY M&A isn’t here yet, but one sign that it’s to the future Firepower report). coming is the way that diagnostics Beyond the headline numbers for continue to grow in importance. the industry in 2019, closer analysis With divestments and tuck-in deals Diagnostics are the pathway offering reveals the emergence of important prominent (see Figure 6), major medtechs direct access to the patient — trends that signal the industry’s medtechs continue to build areas of and the field is booming. direction toward a more personalized, therapeutic strength and identify the data-driven future. Among these right target markets. Instead of a steady Non-imaging diagnostics hit 11% important trends: stream of acquisitions, companies want revenue growth over the past year, to invest more in deals that potentially while the traditional mainstay of the • Medtechs continue to optimize deliver bigger rewards. industry, therapeutic devices, grew their portfolios in ways that lay only 8%. (See Figure 7.) Moreover, the groundwork for future growth Take Johnson & Johnson’s Auris buy- non-imaging diagnostics companies strategies out — the deal will not deliver significant recorded some of the highest annual immediate revenue no immediate growth seen in the entire industry. • Non-imaging diagnostics continue revenue returns, but Johnson & For instance, Exact Sciences, a to grow in commercial importance, Johnson is focused on the long-term cancer diagnostics firm, led the way signalling the growing emphasis opportunity of a genuinely innovative with 71% (+US$188 million) organic on data-driven, personalized and technology, as signaled by its series of growth. These strong revenue figures proactive care investments and partnerships in this were reflected in the high interest • Digital-based, data-driven space since 2015 (see sidebar, “Robotic in diagnostics startups shown by VC technologies continue to win surgery: an emerging battleground”). investors — diagnostic start-ups, such validation from regulators and A structured acquisition deal (with as Thrive Earlier Detection and Click investors alike significant milestone payments; a Diagnostics, were among the biggest trend increasingly prominent across funding rounds over the previous • Progressive providers and payers the industry in the past year — see 12-month period. show a readiness to move toward a “Databook”), sets the investment on a more data-driven approach to care long-term footing. Genomics form a major subset of Smart portfolio strategies for the non-imaging diagnostics field future growth While companies arguably need to be and represent perhaps the single doing more to invest in the right new most critical data source for allowing The cautious M&A climate is a technologies and innovations, these personalized medicine to become negative for overall industry growth, trends at least suggest medtechs are a reality. In 2019, the advance but medtech’s strategic approach to trying to identify the best areas and of genomics toward mass-market optimizing company portfolios is a good to invest with a longer-term strategic availability continued, thanks in part first step to prepare for future growth. mindset. These are the approaches that to the activities of Illumina. The Specialization is a necessary step to medtech needs if it’s going to be able company announced it had reached ensure future success as innovation and to develop the real innovations that can an agreement to acquire Pacific personalization push medtech to invest change the market. Biosciences for US$1.2 billion in more in data-driven approaches. In an November 2018, allowing it to integrate environment where capital is scarce Non-imaging diagnostics point the Pacific’s short-read DNA sequencing and development timelines are long way ahead to personalization platform with its own market-leading and expensive, companies need to use long-read capabilities. their capital wisely to win. EY analysis In a data-driven health care suggests that life sciences companies environment, medtech products will Illumina’s dominant position in the with a narrower and deeper therapeutic not have intrinsic value; their value will market comes with an agenda to push focus outperform those with more be commensurate with the data they access to genomic analysis into the generate. Data will ultimately become mainstream and democratize another
9 | Pulse of the industry 2019 — Medtech in 2019 Figure 6. Portfolio optimization continues to drive medtech M&As
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Pulse of the industry 2019 — Medtech in 2019 | 10 nd e n e en e th d ct e
Figure 7. Non-imaging diagnostics records 11% revenue growth in 2019
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nd uro e n non on lo er te re enue 2 ro th y dise se te ory in on i in ese r h nd her euti di nosti s other e ui ent de i es 10 11 Source: EY, Capital IQ and company financial statement data. Data shown for pure-play companies only. rdio s ul r ent l data stream. Susan Tousi, Senior VP, require medtech companies to get s ul r Product Development (see her guest better at capturing and using data. perspective, “The end of data for In many therapeutic areas, digital data’s sake is now: driving the digital technologies that make the delivery transformation of biology through of health care more efficient or make the establishment of the internet of interventions more personalized and ulti le hth l i genomics”), notes that Illumina is now precise are essential to the strategy. generating more than 100 petabytes of However, the EY digital deals database data each year, and is focused on the (which uses a broad definition of digital need to “address cost and accessibility health covering health applications of of genomic technology, but also to social media, data analytics supported rtho edi ll other protect and standardize genomic data by machine learning or AI, mobile/web as a means to turn it into actionable services or platforms, telemedicine, But while medtech companies and meaningful biological insights as wearables, IoT, cloud storage and hesitate to sign new deals, a string of quickly and as accurately as possible.” digital patient data), indicates that new approvals continue to validate medtech companies are still investing the possibilities of digital health AI, augmented reality and type 2 in piecemeal strategies when it comes technologies. In October 2018, the diabetes are proving the value of to digital. The high valuations for digital FDA approved the first augmented digital health technologies health companies, which outperform reality system for pre-operative surgical the medtech sector overall, may be planning, the OpenSight AR system While diagnostics represent a push one reason for the hesitation. Another built through collaboration between toward personalized care, the real may be lack of clarity around which Novarad and Microsoft HoloLens. breakthroughs in personalization technologies will ultimately be market-leading. 11 | Pulse of the industry 2019 — Medtech in 2019 Figure 8. More than 30 AI algorithms have won FDA approval 2018-19
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The agency also approved a steady Diabetes is still the therapeutic area are starting to take market share away stream of AI algorithms over the past that sets the pace for the digital from companies that are wedded to 12-month period (see Figure 8). health market. In the last year, we’ve a proprietary, siloed approach.” It seen the continued rapid expansion isn’t devices alone but interoperable, AI is transforming the imaging sector, of Dexcom, which has disrupted the patient-centered networks of devices but the potential for the technology is traditional diabetes device market with and data analytics that can improve not just upgrading existing equipment, its continuous glucose monitor (CGM) care and convenience and capture but potentially transforming the entire portfolio. Dexcom’s edge in the market market share. business model. As Abdul Hamid Halabi, is not based on superior therapeutic NVIDIA Global Lead for Healthcare & device hardware, but on the data Progressive providers and payers AI, observes, AI is not only “making analysis potential of its CGM. demand more of medtech these instruments smarter, faster and The pieces are coming together but more reliable, but it is also making During this same timeframe, the medtech is not moving fast enough them more portable and mobile” Tandem t:slim X2 device Dexcom’s to embrace the business models that (see his guest perspective, “The AI CGM connects to won the first FDA can accommodate these technological opportunity in health care”). By pushing recognition as an interoperable insulin innovations. In fact, other companies medtech rapidly in this direction, AI is a pump in February 2019. The market in the health ecosystem seem to be significant driver of decentralized success of Dexcom and Tandem’s moving faster to rethink the business care that can be delivered anywhere interoperable system illustrates Wende model. Consider Mercy, which has and anytime. Hutton’s point that “companies that pursued the ideal of a bedless hospital are at the forefront of interoperability
Pulse of the industry 2019 — Medtech in 2019 | 12 based on remote monitoring, predictive trust in the security of connected Two major roadblocks exist to industry analytics and integrated clinician teams. devices, and building a more agile forging closer collaborative links with Through its Virtual Care Center, it has and data-enabled supply chain (see other stakeholders. First, the technical a facility dedicated entirely to care “A cybersecure ecosystem for data challenge: the lack of interoperability outside of its own walls. exchange” and “Securing the supply between the data-management chain”). At a larger scale, medtech systems used across the existing Other leading providers and payers faces the challenge of constructing ecosystem means that data remain are working to integrate data, with new business models, better adapted locked in silos. Without a common systems such as Johns Hopkins and to the explosion of available data digital backbone, there’s no mechanism Common Spirit Health seeking to build and the emphasis on better, to allow data to flow seamlessly an architecture that can aggregate more personalized outcomes (see between stakeholders. data above the EHR level. As discussed “Securing value”). in the EY report, New Horizons 2019, Second, there is no incentive for other building a viable long-term model for stakeholders to work together on health care data may need companies Looking beyond: the developing that digital infrastructure if to embrace an open data architecture connected medtech they don’t feel that medtech companies that can incorporate core elements are aligned with their values. There such as EHRs without being constrained ecosystem are few precedents for stakeholders by these systems. Payers also continue As the health care ecosystem becomes collaborating at the scale needed. to try to reinvent the business model, more connected, the advances Overcoming stakeholder skepticism with UnitedHealthcare, for example, in diagnostics, genomics, AI and about medtech as a trusted partner pursuing value-based approaches and other emergent data technologies will be a broad, ongoing challenge acquiring PatientsLikeMe is a signal will reinforce each other, driving that requires more participatory of its intention to invest in patient- an exponential acceleration toward relationships with partners across the focused research. personalized care. We can identify value chain. This may involve medtech challenges that medtech must To result in significantly better health embracing value-based payment as overcome to realize this vision. outcomes for patient-consumers, part of a closer collaboration. As Ultimately, this acceleration toward individual data-driven innovations John Liddicoat, EVP and President, personalized care points toward the must be linked together via a Medtronic Americas Region, says realization of an anytime, anywhere common infrastructure. To create “In the journey toward delivering care paradigm that will transform this infrastructure, companies need better patient outcomes, improving medtech in ways that cannot yet be to invest in a secure, interoperable access, and lowering overall costs fully anticipated. digital infrastructure that allows data of care, collaborations in risk-based to be shared appropriately. Separately, Medtech is already creating connected contracting, operational alignment, stakeholders will have to move away devices. What it can’t create is a and data transparency are foundational from transactional relationships to connected ecosystem to plug these requirements,” which brings data partnerships that emphasize supplying devices into. That’s because building a analytics capabilities to clinicians to the right customers with the right working, linked-up ecosystem isn’t help them identify higher-risk patients, products and services. a task for the industry to undertake and does this as part of an “end-to- alone — it needs to be a collaborative end offering in an at-risk business The achievement of this interoperable, effort between industry, regulators, model” (see his guest perspective, open ecosystem based on partnership providers, payers and patient- “Collaborations fueling the future of will be the long-term basis for medtech consumers together. Put simply, health care”). to achieve future value. Already, we if medtech can’t strengthen its can identify some of the key elements Some medtech innovators are already connections with the other that need to be established for success, planning for a highly connected, data- stakeholders, it can’t extract real including building greater stakeholder driven future — consider Illumina’s value from its connected devices. goal, as outlined by Susan Tousi “to
13 | Pulse of the industry 2019 — Medtech in 2019 connect our smart sequencers to the companies that seize this opportunity internet, to each other, and to our but to do so they will need to rethink partners’ applications,” with the intent the business model in fundamental Put simply, if medtech to integrate “rich data streams, open ways. As Mark Boxer, Executive Vice up new analytical possibilities and President and Global Chief Information “can’t strengthen its usher in the era of digitized biology.” Officer, Cigna, says, “health care now, connections with the At a broader scale, the technical and and in the future, requires a different logistical demands of building a digital orientation, different investments other stakeholders, backbone that can be accepted and and different skill sets” (see his guest it can’t extract used across the ecosystem represent perspective, “How data is fueling a new a longer-term challenge that may approach to whole person health”). The real value from its demand expertise with data systems companies that can realize these new connected devices. that lie outside the industry’s current and different capabilities will be those capabilities. poised to dominate the era of data- driven, personalized medtech. Nevertheless, medtechs can begin to address both these issues at a local scale, by building devices that capture and share data securely, working closely to understand their real customers’ needs and using data to better deliver value to those customers. The onus is on the industry to take the first steps toward constructing the connected ecosystem. The potential rewards are significant for the
Figure 9. The equation for capturing future value
Data Future Innovation (Connect + Combine + Share) value Outcomes x Personalization
For people Participatory Data Traditional and Platforms For physicians Precise streams non-traditional of care partners For payers Predictive For policymakers Proactive
Source: EY
Pulse of the industry 2019 — Medtech in 2019 | 14 The rising investment in the sector will continue “to boost both awareness of the technology and the numbers of surgeons trained on robotic surgery platforms.
15 | Pulse of the industry 2019 — Robotic surgery: an emerging battleground Robotic surgery: an emerging battleground Since launching its first robotic surgery platform in 2000, Intuitive Surgical has maintained its leadership position in this sector. However, the increasing level of activity in recent years from both established and emerging players may soon change the market dynamics. Companies such as Stryker, Smith & Nephew, Zimmer Biomet and Globus Medical have all made acquisitions (and/or signed collaborations) to acquire or enhance robotic surgical platforms. In August 2019, Siemens Healthineers also placed a big bet on the sector, paying US$1.1 billion for Corindus Vascular Robotics’ minimally invasive surgery (MIS) platform for coronary, peripheral and neurovascular operations. But perhaps the most significant version of the platform. In June 2019, sign that robotic and digital surgery Medtronic also formally announced its is assuming a major role in medtech partnership with Karl Storz, focused companies’ growth strategies comes on further integrating the endoscope from the dealmaking activities of two manufacturer’s 3D vision systems leading global medtechs: Medtronic into Medtronic’s new robotic platform and Johnson & Johnson. In its biggest for MIS. buy since Covidien, Medtronic acquired Mazor Robotics in December 2018, Johnson & Johnson initiated its own paying US$1.7 billion for Mazor’s digital surgery efforts in 2015 through orthopedic robotic guidance system its joint venture, Verb Surgical, with and quickly integrating its own Stealth Verily Life Sciences. Verb plans to software to launch an upgraded launch its digital MIS platform in
Pulse of the industry 2019 — Robotic surgery: an emerging battleground | 16 2020. After acquiring Orthotaxy for its robotic surgery’s benefits relative to its The rising investment in the sector orthopedic-surgery digital prototype costs. Nevertheless, while high capital will continue to boost both awareness in 2018, Johnson & Johnson spent acquisition and maintenance costs of the technology and the numbers of US$3.4 billion in February 2019 to still represent a barrier to adoption, surgeons trained on robotic surgery acquire Auris Health. The deal gives hospitals now have several arguments platforms. Meantime, the intensifying Johnson & Johnson access both to to justify the investment: robotic competition will bring down the costs Auris’ digital endoscopy platform platforms can reduce surgical procedure associated with robotic surgery, Monarch, and to its CEO and founder complexity, increase precision and opening the market to medium-to- Fred Moll, the co-founder of several reproducibility, reduce time in the small hospitals in developed countries, robotics companies including operating room, improve outcomes and big hospitals in the emerging Intuitive Surgical. for patients, accelerate recovery, cut markets. Notably, Intuitive brought re-admission and re-operation rates and its more affordable da Vinci X range Despite growing confidence from help providers enhance their own brand system to the market in 2017 and medtech acquirers about the promise and gain competitive advantage. Smith & Nephew is planning to bring of the technology, health care the ANTHEM Total Knee System to stakeholders continue to debate emerging markets by 2020.
Figure 10. Robotic surgery - top players
Company Products in market or pipeline Initial/latest approval and launch status Area of intervention Company Key M&A/partnerships/collaborations
Intuitive surgical Da Vinci System • 2000 / 2019 Minimally invasive surgeries (for Intuitive surgical • 2019: acquired Schölly Fiberoptic's robotic endoscope business (S, Si, Xi, X, SP, Ion lung biopsy system) several indications)
Stryker Mako surgical robotic line • 2005 / 2017 Partial knee, total hip, total knee Stryker • 2013: acquired surgical robotic company Mako Surgical for US$1.65 billion replacement • 2018: acquired Invuity, an advanced photonics and surgical lighting company, for $190m
Medtronic Mazor X robotic guidance systems • 2011 / 2019 Spine and brain surgery Medtronic • 2018: acquired Mazor Robotics, maker robotic guidance systems for US$1.6 billion; later combined Mazor's products with Medtronic's Stealth software to create the Mazor X Stealth platform
Mazor X Stealth Edition robotic guidance • Pipeline Minimally invasive surgeries • 2019: partnership with Karl Storz to incorporate 3D vision systems and visualization components into surgical robotic pipeline platform (expected)
Smith & Nephew NAVIO (PFS, Surgical) • 2012 / 2017 Partial and total knee replacement Smith & Nephew • 2015: acquired Blue Belt technologies for US$275 million for its robotic surgical system
NAVIO 7.0 • Pipeline Upgrade of earlier versions; will • 2019: acquired Brainlab‘s orthopedic joint reconstruction business; installed Brainlab’s hip software onto its in-development bring the ANTHEM Total Knee NAVIO 7.0 software System for Emerging Markets onto • 2019: acquired Atracsys and its optical tracking camera technology Navio (expected approval in H2 2019, launch in 2020)
Zimmer Biomet ROSA robotic surgery platform • 2012 / 2019 Single surgical platform for Zimmer Biomet • 2016: acquired Medtech SA (Rosa Surgical robot) for US$132 million neurosurgical, spinal and knee • 2018: collaboration with Apple to study patient experience with joint replacement surgery pathologies
Globus Medical ExcelsiusGPS robotic guidance and • 2017 Minimally invasive and open Globus Medical • 2014: acquired Excelsius Surgical for its ExcelsiusGPS system navigation system orthopedic and neurosurgical • 2017: acquired KB Medical for its AQrate™ Robotic Assistance system procedures • 2018: acquired Nemaris and its Surgimap surgery planning software
TransEnterix Senhance robotic surgery system • 2017 Minimally invasive surgeries TransEnterix • 2015: acquired surgical robotics division of SOFAR S.p.A. for its ALF-X Surgical Robotic System for US$100 million (laparoscopic surgeries) • 2018: acquired Medical Surgical Technologies for US$33 million to add to the company’s Senhance digital laparoscopy platform
CMR surgical Versius Surgical Robotic System • 2019: expected approval and launch Minimally invasive surgeries CMR surgical
Johnson & Monarch platform • 2018 Lung biopsy (for diagnosing) and Johnson & • 2019: acquired Auris Health for it Monarch system in $3.4 billion deal; companies had existing collaboration to combine Auris’ Johnson treatment of cancerous tumors Johnson Monarch Platform with J&J’s Neuwave Flex Microwave Ablation System
Digital surgery platform • Pipeline: expected approval and launch in Minimally invasive surgeries and • 2015: partnership with Google (Verb Surgical) to develop digital ecosystem 2020 orthopedic procedures • 2018: acquired Orthotaxy for its orthopedic-surgery digital prototype
Siemens CorPath vascular robotic system • 2012 / 2016 Percutaneous coronary and Siemens • 2019: announced acquisition in September of Corindus for US$1.1 billion (deal expected to close by end of 2019) Healthineers peripheral vascular interventions Healthineers
CorPath GRX (second generation vascular • 2016 / 2019 Percutaneous coronary, peripheral robotic platform) vascular, and neurovascular interventions (PCI, PVI, NVI)
Source: EY, company reports. 3. Approval and launch years are the first approval and launch years in any Notes: geography. 1. The information in the table is as of September 2019. 4. Surgical systems launched by a company before its acquisition have been 2. Only the top companies have been considered (the list is not exhaustive). captured under the acquirer. 5. Only robotic surgery specific M&A and partnerships have been considered.
17 | Pulse of the industry 2019 — Robotic surgery: an emerging battleground While these developments make As the market becomes increasingly surgeries; seamlessly integrating and surgical platforms more accessible, crowded with players and platforms, improving the end-to-end process smaller next-generation robots with companies will need to invest in the (pre-, intra-, and post-surgery); and enhanced vision systems, imaging right strategy to differentiate their collecting data that can help establish and haptic feedback capabilities will solutions. Critically, they will need to outcomes-driven payment models. further expand the range of possible invest in developing platforms that Ultimately, while the surgical robotic procedures and open new indications, can link with the emerging, connected platforms represent a key new including MIS for lower-complexity digital ecosystem, gathering data and technology for medtech companies, surgeries. Intuitive has again led the leveraging it to drive better outcomes. their interoperability with connected way, with its Ion lung biopsy system Winning strategies will need to take operating rooms of the future will expanding the platform to cover lung advantage of future opportunities. be equally important for their cancer diagnosis; Auris’ Monarch These include: developing deep long-term prospects. platform is also expected to launch in learning algorithms to complement this indication by 2020. surgical expertise to help with real- time decision-making during complex
Figure 10. Robotic surgery - top players
Company Products in market or pipeline Initial/latest approval and launch status Area of intervention Company Key M&A/partnerships/collaborations
Intuitive surgical Da Vinci System • 2000 / 2019 Minimally invasive surgeries (for Intuitive surgical • 2019: acquired Schölly Fiberoptic's robotic endoscope business (S, Si, Xi, X, SP, Ion lung biopsy system) several indications)
Stryker Mako surgical robotic line • 2005 / 2017 Partial knee, total hip, total knee Stryker • 2013: acquired surgical robotic company Mako Surgical for US$1.65 billion replacement • 2018: acquired Invuity, an advanced photonics and surgical lighting company, for $190m
Medtronic Mazor X robotic guidance systems • 2011 / 2019 Spine and brain surgery Medtronic • 2018: acquired Mazor Robotics, maker robotic guidance systems for US$1.6 billion; later combined Mazor's products with Medtronic's Stealth software to create the Mazor X Stealth platform
Mazor X Stealth Edition robotic guidance • Pipeline Minimally invasive surgeries • 2019: partnership with Karl Storz to incorporate 3D vision systems and visualization components into surgical robotic pipeline platform (expected)
Smith & Nephew NAVIO (PFS, Surgical) • 2012 / 2017 Partial and total knee replacement Smith & Nephew • 2015: acquired Blue Belt technologies for US$275 million for its robotic surgical system
NAVIO 7.0 • Pipeline Upgrade of earlier versions; will • 2019: acquired Brainlab‘s orthopedic joint reconstruction business; installed Brainlab’s hip software onto its in-development bring the ANTHEM Total Knee NAVIO 7.0 software System for Emerging Markets onto • 2019: acquired Atracsys and its optical tracking camera technology Navio (expected approval in H2 2019, launch in 2020)
Zimmer Biomet ROSA robotic surgery platform • 2012 / 2019 Single surgical platform for Zimmer Biomet • 2016: acquired Medtech SA (Rosa Surgical robot) for US$132 million neurosurgical, spinal and knee • 2018: collaboration with Apple to study patient experience with joint replacement surgery pathologies
Globus Medical ExcelsiusGPS robotic guidance and • 2017 Minimally invasive and open Globus Medical • 2014: acquired Excelsius Surgical for its ExcelsiusGPS system navigation system orthopedic and neurosurgical • 2017: acquired KB Medical for its AQrate™ Robotic Assistance system procedures • 2018: acquired Nemaris and its Surgimap surgery planning software
TransEnterix Senhance robotic surgery system • 2017 Minimally invasive surgeries TransEnterix • 2015: acquired surgical robotics division of SOFAR S.p.A. for its ALF-X Surgical Robotic System for US$100 million (laparoscopic surgeries) • 2018: acquired Medical Surgical Technologies for US$33 million to add to the company’s Senhance digital laparoscopy platform
CMR surgical Versius Surgical Robotic System • 2019: expected approval and launch Minimally invasive surgeries CMR surgical
Johnson & Monarch platform • 2018 Lung biopsy (for diagnosing) and Johnson & • 2019: acquired Auris Health for it Monarch system in $3.4 billion deal; companies had existing collaboration to combine Auris’ Johnson treatment of cancerous tumors Johnson Monarch Platform with J&J’s Neuwave Flex Microwave Ablation System
Digital surgery platform • Pipeline: expected approval and launch in Minimally invasive surgeries and • 2015: partnership with Google (Verb Surgical) to develop digital ecosystem 2020 orthopedic procedures • 2018: acquired Orthotaxy for its orthopedic-surgery digital prototype
Siemens CorPath vascular robotic system • 2012 / 2016 Percutaneous coronary and Siemens • 2019: announced acquisition in September of Corindus for US$1.1 billion (deal expected to close by end of 2019) Healthineers peripheral vascular interventions Healthineers
CorPath GRX (second generation vascular • 2016 / 2019 Percutaneous coronary, peripheral robotic platform) vascular, and neurovascular interventions (PCI, PVI, NVI)
Pulse of the industry 2019 — Robotic surgery: an emerging battleground | 18 The volume of M&A activity from “Asia-Pacific buyers surged 239%, to 61 deals — more than the total number of Asia-Pacific-based deals over three previous years combined.
19 | Pulse of the industry 2019 — Acquisitions and innovations in the Asia-Pacific market Acquisitions and innovations in the Asia-Pacific market The headline M&A figures, for the 12-month period ending 30 June 2019, conceal one significant development: a big uptick in medtech M&A deals with buyers based outside the US and European markets. The Asia-Pacific region was notably busy. Despite the total deal value slipping 17% (to just under US$4 billion) the volume of M&A activity from Asia- Pacific buyers surged 239%, to 61 deals — more than the total number of Asia-Pacific-based deals over three previous years combined. Seven of these deals concentrated on targets within the US and European markets — most prominently, Japan’s PHC Holdings acquired Thermo Fisher Scientific’s anatomical pathology business for US$1.14 billion. This deal forged a new stand-alone entity named Epredia, and accounted for the bulk of the US$1.7 billion, (spread across nine M&A deals) involving Japanese buyers. China was a far larger presence in the M&A market, with 36 deals involving Chinese buyers, constituting US$2.0 billion in total deal value. US and European medtech draw an market opportunity. Witness the launch increasing share of their revenues of Ayushman Bharat (National Health from Asia-Pacific, and the expansion of Protection Scheme) in India in 2018 health coverage in these geographies and Jaminan Kesehatan Nasional (JKN) in recent years will only increase the in Indonesia in 2015, both aiming to
Pulse of the industry 2019 — Acquisitions and innovations in the Asia-Pacific market | 20 provide universal health coverage. The domestic companies looking system in India in 2019, while China Meanwhile, over the past decade China to capture the Asia-Pacific market hosted the first remote brain surgery in has been able to provide basic health opportunities are also investing heavily January 2019. insurance coverage to almost all its in R&D to innovate and launch new people, and is now aiming to increase products. The Asia-Pacific region During the same period, the Asia- the extent of the coverage. As the may soon become a powerhouse of Pacific region contributed 24% of the increasing investment in M&A from affordable innovation. Pioneering work medical device approvals outside the Asia-Pacific-based companies suggests, in surgical technologies in 2018-19 US market in 2018 (57 out of 240 the domestic industry in this region notably took place in the region. For such approvals; up from 42 out of 242 continues to grow to meet this rising example, Corindus’s CorPath robotic (17%) in 2016). Six countries accounted demand, and may increasingly become surgical platform was used in the first for the bulk of these new devices an important source of competition to in-human telerobotic intervention study (up from three in 2016), with China the US and European medtech sector. in India in 2018 and CMR Surgical at the forefront. China’s 17 device tested its Versius robotic surgical approvals were exceeded only by Israel
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21 | Pulse of the industry 2019 — Acquisitions and innovations in the Asia-Pacific market (28 approvals) and the US itself with Bejing-based Tencent Trusted Doctors, 97. MicroPort Scientific Corporation which picked up US$250 million in a was responsible for 12 of China’s new funding round. The Asia-Pacific region launches, and has established itself “may soon become as one of the leading players in the Tencent Trusted Doctors originated cardiac interventional devices market, as Tencent Doctorwork, a business a powerhouse of recently winning CE approval for its unit of the Chinese internet giant affordable innovation. next-generation targeted drug eluting Tencent Holdings. Tencent’s health stent, Firehawk Liberty. In 2018, the market activities include supplying company became the one of the top public users with health information, five cardiac rhythm management online consultations and registrations device manufacturers in the world and and other medical services, enabling established headquarters in France. providers to take payments through WeChat and to link health records China at the forefront of between hospitals, and supplying AI digital health tools to doctors. The scale and scope of Tencent’s strategy and investment in With its widely-noted expertise and health care illustrate why the company heavy investment in genomic and AI (and other Chinese competitors, most technologies, and its rapidly growing notably Tencent’s equally large and digital economy, China is widely ambitious rival Alibaba) are expected to anticipated to be a key player as remain key players in the digital era of medtech and its surrounding health health –-- both in Asia-Pacific and in the care ecosystem move towards a digital, wider global market. connected future. In all, Chinese investment accounted for 37% of global digital health funding in Q2 2019, according to Rock Health. One of the largest 2019 investments in digital health funding to date came from
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Pulse of the industry 2019 — Acquisitions and innovations in the Asia-Pacific market | 22 Interoperability isn’t just about enabling “two devices to connect with each other: they need to be able to connect securely, without data being lost, stolen or corrupted.
23 | Pulse of the industry 2019 — A secure ecosystem for data exchange A secure ecosystem for data exchange Medtech already has the opportunity to improve the connectivity capabilities of its devices and increase the level of trust they hold with stakeholders. Seizing this opportunity requires an emphasis on secure devices, especially cyber protection. Interoperability isn’t just about enabling two devices (or a device and another system) to connect with each other: they need to be able to connect securely, without data being lost, stolen or corrupted.
David Klonoff, Medical Director of the While the so-called “Homeland” Mills-Peninsula Diabetes Research scenario of a medical device being Institute (Sutter Health), led the teams directly hacked remains a theoretical that created the first two consensus anxiety, the bigger issue is the lack medical device cybersecurity standards, of data security. Across the US alone, with FDA input. He notes, “for two health care data breaches have been medical devices to be interoperable, recorded at a rate of about one per they must be able to exchange day across 2018-19, according information safely, effectively, and to a report from Protenus and securely.” That means designing DataBreaches.net. The report states devices that can withstand hostile that more than 31 million health care action from malware. Vulnerabilities records were breached in the US in the extend beyond the potential to directly first six months of 2019 — more than hack into and externally control a double the number recorded in 2018. device to more likely threats associated This level of vulnerability in the health with misused or corrupted data. information architecture needs fixing
Pulse of the industry 2019 — A secure ecosystem for data exchange | 24 before a connected ecosystem can technologies if they come via trusted be achieved. Medical devices need to partner companies. This principle become part of the solution. is even likely to become part of the regulatory landscape: the FDA For now, compliance with cybersecurity suggested in July 2019 that in the standards is optional for industry future it may approve software as a players. But as connectivity becomes medical device (SAMD) for the market ever more integral to how health care not by evaluating individual software works, expect to see a tougher line products but by evaluating the culture from regulators. Suzanne Schwartz, and practices of manufacturers Associate Director for Science & themselves. The FDA describes this Strategic Partnerships, Center for as a “total product lifecycle (TPLC) Devices & Radiological Health at the approach” that can allow devices onto FDA, has already suggested that in the market “which have the potential to the future the agency may “require adapt and optimize device performance coordinated vulnerability disclosure in real-time to continuously improve through legislation in order to level the health care for patients.” Companies playing field.” At present, medtechs that win trust for high standards can opt not to declare known of technical excellence as well as a vulnerabilities; and there are business commitment to transparency and incentives not to be transparent. close real-world monitoring of their Companies that disclose potential own products will potentially have a vulnerabilities may be penalized by streamlined fast-track to market in the investors, for instance. connected ecosystem of the future.
But companies that want to win trust should not wait for the regulators to take the lead: they should move proactively to show that they’re taking steps to secure their products, and even to secure the data ecosystem around their products. Customers may well be reluctant to switch away from a trusted partner with the right cyber protection strategy, since the downside risk is too great. The companies that are thinking beyond their own vulnerability to the bigger question of building safe networks to move data around the ecosystem will be best positioned to become the trusted partners of the future — and benefit from the network effects that have proven key to digital platform dominance in other sectors.
As the industry moves rapidly into a new technological landscape, trust will be increasingly critical. Stakeholders are more likely to embrace unfamiliar
25 | Pulse of the industry 2019 — A secure ecosystem for data exchange Companies that want to win trust “should not wait for the regulators to take the lead: they should move proactively to show that they’re taking steps to secure their products, and even to secure the data ecosystem around their products.
Pulse of the industry 2019 — A secure ecosystem for data exchange | 26 E-commerce has dramatically changed the “way all industries are running their supply chain. Health care has been one of the last industries to really figure it out.
27 | Pulse of the industry 2019 — Securing the supply chain Securing the supply chain
The supply chain that enables the industry to generate products and bring them to market forms the basic structure of the medtech ecosystem. But the deficiencies in data availability and trust between stakeholders limit the effectiveness of the medtech supply chain for all partners and make it a prime target for transformation. Outside of medtech, technology giants such as Apple and Amazon have made headlines and boosted margins by strategically rethinking supply chain management. While no such revolution has affected the medtech sector to date, companies are recognizing the potential for liberating value through supply chain reform.
The inefficiencies within health care that the reps have to hold a great deal supply chains are well established. of inventory; even with this inefficient Dan Gagnon, VP of Global Healthcare inventory management, it is difficult Strategy and Marketing at supply to cover all contingencies. Provider chain giant UPS, says, “E-commerce groups confront their own supply chain has dramatically changed the way all issues: committed bulk contracts with industries are running their supply group purchasing organizations and chain. Health care has been one of the distribution organizations can leave last industries to really figure it out.” providers with supply chain set-ups that Medtech is no exception. For example, are inflexible and entrenched. in the orthopedic sector, “trunk stock” has traditionally been carried by As UPS’s Gagnon explains it, the company field reps, who hold the kit fragmented and “convoluted” nature and deliver it as needed to doctors and of the health ecosystem drives these hospitals. This kind of approach means issues in supply chain: “There are
Pulse of the industry 2019 — Securing the supply chain | 28 so many parties in the health care Connected devices will be able to supply chain. There are three flows; continuously interact with the patient- you have physical flow, but there’s consumer, with provider and payer also information flow and financial data systems, and with the broader flow. In tech or fast-moving consumer ecosystem. As care increasingly goods, those three flows are somewhat decouples from traditional channels integrated and driven by the same and institutions, real-world monitoring parties. In health care you have and management devices will become different parties.” increasingly pivotal to how care is delivered — particularly in a health care This complex situation is an ongoing environment where remote chronic logistical headache for all ecosystem disease management is becoming ever partners. Some provider groups more important. have begun to address this problem themselves — Mercy Health, for Moreover, these software-dependent example, formed an alliance with devices will involve regular updates and Medline in 2017, and has since consequently shorter product cycles; consolidated and condensed its supply software will be continually upgraded chain, cutting margins and reducing the to optimize its functionality and number of manufacturers with which it security, and this will entail continual deals by up to 50%. updating of products in the market. All of these evolutions in the nature Medtech needs to aim to partner with of medical devices will both demand providers and its other stakeholders to and enable much faster, more flexible try to enable this kind of supply chain and multidirectional supply chains, improvement while also reforming its which can meet the real needs of own inefficiencies. The good news is the customers. Ultimately, to deliver that the growth of connected devices, anytime, anywhere care to the patient- and the increased opportunities they consumer, the data supply chain will offer to capture and share real-time become as critical as the product supply data, should give them the opportunity. chain, and medtech must position itself Rather than “adding digital” to medical to secure those data streams for itself devices and unloading product into the and its stakeholders. market, medtechs should seek to tap the potential of digital, data-capturing technologies to rethink the entire value chain. With connected devices enabling a two-way dataflow along the supply chain, companies will have the tools to build more nimble and responsive logistical processes, drawing on dynamic real-time data to not only capture where products are in the market, but predicting where they’ll be needed to next.
29 | Pulse of the industry 2019 — Securing the supply chain Building a working, linked-up “ecosystem isn’t a task for the industry to undertake alone — it needs to be a collaborative effort between industry, regulators, providers, payers and patient- consumers together.
Pulse of the industry 2019 — Securing the supply chain | 30 In the future, data will become “critical to determining whether or not an innovation represents a real breakthrough.
31 | Pulse of the industry 2019 — Securing value Securing value
As the sector evolves toward a more dynamic ecosystem built on data sharing, medtechs will need to answer two key questions. First, who is the customer they are best- placed to serve? Second, what data will they need to maximize the value to bring to this customer?
When they can answer these questions, classes work, driving them toward a medtechs will be able to identify the more personalized, high-touch data business model that represents the relationship with patient-consumers. best vehicle for them to deliver value In addition, data will also (as described in future. Our analysis characterizes in “Securing the supply chain” article) four distinct emerging business models transform the efficiency with which associated with medtechs (see Figure companies can supply commodity 14). Each of these models will have products with minimal marginal cost. highly specific data and analytics needs as medtech companies embrace a data- The specialized data needs and complex driven future (see Figure 15). business model adaptations needed to excel in any of these approaches At present, most large medtechs rely means that few, if any, companies will both on high-end innovation and on be able to pursue multiple business delivering significant volumes of less models. Capital constraints mean differentiated products. In the future, that companies will need to zero in on data will become critical to determining the approach that fits with their own whether or not an innovation culture and capabilities, and focus on represents a real breakthrough. Data delivering in this niche. will also change the way many product
Pulse of the industry 2019 — Securing value | 32 Figure 13. Business models for the future
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Breakthrough innovators carve out significant opportunities for better health outcomes. Increasingly, medtech players. But in increasingly it will not be just a question of Medtech has traditionally generated crowded markets, with payers and creating innovative devices, but of value through creating innovative providers pushing for clear evidence of demonstrating how their use benefits devices through high investment in improved outcomes, medtechs aiming the wider ecosystem. R&D. While this is still the default for breakthrough innovation will need business model for many leading to focus on capturing the data that can Disease managers companies in the sector, a lack of validate their products’ effectiveness. major market breakthroughs in The imperative to look beyond the The success of future robotic surgery recent years highlights the challenges product to the wider possibilities of the platforms, for example, will depend not confronting medtechs dependent data ecosystem around the product just on the cutting-edge hardware but on device innovation. Innovations may push many device innovators on its ability to connect into a wider such as Abbott’s growing MitraClip toward embracing a “disease manager” data ecosystem, including imaging “toolbox” for structural heart repair, approach to medtech. The focus in the technologies and patient monitoring or Intuitive Surgical’s da Vinci diabetes market has already moved devices, to help deliver better surgical platform demonstrate that stand-out beyond the product to the level of training, better services and ultimately technological breakthroughs can still
33 | Pulse of the industry 2019 — Securing value connected, convenient care that the monitoring and management the key care holistically, maximizing the use of product can help enable for the patient. to improving treatment outcomes. data to best manage all of the patient’s Infusion pumps, smart pens and In the future, as data capture chronic conditions and comorbidities. CGMs are now competing not just as opportunities increase via connected differentiated products in the market, devices, and unlocked algorithms Lifestyle managers but as potential components in an increasingly give analytics the chance Data capture and analysis aren’t just interoperable system personalized to to learn indefinitely more about essential for the management of manage the patient-consumer’s chronic patients, devices may become highly chronic diseases such as diabetes or disease as effectively and conveniently personalized tools for the individual heart failure. They are also important as possible. The same approach will patient to manage their disease. Future for lifestyle decisions that increasingly be needed across the chronic disease disease managers will need to look have health implications. As such, spectrum, with personalized, ongoing beyond therapeutic area silos to deliver
Figure 14. Data needs for different potential medtech business models
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Pulse of the industry 2019 — Securing value | 34 it’s not surprising that consumer the business model, the efficient electronics devices are evolving producer model for medtech has yet to beyond fitness and nutrition see the kind of radical logistical reform applications to provide real-time, that has delivered new efficiencies in, medical-grade feedback that can help for example, the retail sector. patient-consumers manage their lifestyles more effectively. Consider the Apple Series 4 Watch, which contains an integrated ECG monitor, and the ever-growing number of apps focused on aspects of health maintenance and wellness, from diet to exercise to blood- pressure monitoring. The ubiquity of sensors, wearables and smartphone software represents a huge opportunity The specialized data needs and complex for companies to develop this “softer” “business model adaptations needed to side of personalized medtech for managing the patient-consumer, using excel in any of these approaches means data to optimize personalized, holistic that few, if any, companies will be able to lifestyle guidance. pursue multiple business models. Efficient producers
Companies that focus primarily on cutting margins via supply chain transformation can target the significant market in low-tech, commodity medtech products. Numerous commodity product lines represent medtech staples that are needed by hospitals and clinics worldwide, but command low margins: from gauzes or syringes to maturing product categories such as stents and even basic imaging devices. Despite the relatively “low-tech” nature of the commodity device segment, to succeed in this market medtechs will need to utilize sophisticated data analytics to run operations on as lean and efficient a basis as possible. This means monitoring and predicting demand and distributing products rapidly and seamlessly wherever they need to be — whether inside or out of traditional health care delivery settings. While some companies have made significant steps toward streamlining
35 | Pulse of the industry 2019 — Securing value Pulse of the industry 2019 — Securing value | 36 GUEST PERSPECTIVE
Kevin Lobo Chairman and Chief Executive Officer, Stryker Chairman, AdvaMed Board of Directors
Everyone knows someone who has • Reduce breast cancer mortality by a The journey benefitted from our products. But if third; and asked “What is medical technology?” or • Cut the number of days people spent so far for “How important is medtech to modern in hospitals by 59 percent. health care?” chances are most people medtech — and might be able to give a few examples These advancements have also yielded and generally agree it’s a positive. incredible savings and efficiencies the road ahead across our health care system by But how many people truly understand detecting disease earlier, when it is Medical technology represents one of the incredible diversity of our industry, more easily and successfully treatable; the most misunderstood elements of how we innovate and the benefits we replacing more invasive procedures; modern health care. provide that allow for earlier disease reducing doctor visits through remote detection, less invasive procedures and monitoring technologies; and countless On the one hand, medtech is more effective patient care? other ways. everywhere. There is not a medical procedure or health care setting — from With health care so often a topic of At Stryker, our mission is to make the ambulance to the ER to the OR from national interest and conversation, it is health care better by addressing the hospital bed to the doctor’s office more crucial than ever for policymakers the needs of providers and their and even in our own homes — where and the public to better understand patients. For instance, our mechanical medical technology does not play a what our industry does if we are thrombectomy products, which remove vital role. to continue providing life-changing clots from blood vessels, combined innovations to patients. with better pathways for care for Diagnostics, monitors, surgical tools stroke victims has the potential to and equipment, implantable devices We as an industry have a lot to be proud significantly reduce disability and and even record-keeping systems — all of. Over the last 30 years, medtech change the paradigm of care globally. these medical technologies and many advancements have helped: As another example, Mako, our robotic others touch patients multiple times arm-assisted surgery product, enables during an episode of care. Physicians, • Lengthen life expectancy by over surgeons to have a more predictable too, rely on the tools the medical 5 years; surgical experience when performing technology industry provides to • Lower heart disease fatalities and joint replacement surgery. constantly improve patient care. We are stroke deaths each about 60 percent; there when it matters.
37 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 38 Data-driven medical devices will be at the forefront of that transformation, collecting individual patient information that can be used to improve outcomes and efficiency, better manage chronic conditions, deliver more targeted therapies and avoid hospitalizations.
Our industry provides all this and incorporating advances in other innovation, efficiency and improved disciplines to push the boundaries of patient care, and we do it in a cost- what is possible. effective manner. Data show that medical device prices in the U.S. over Just recently, the world learned that the last 10 years have increased at researchers in Israel have created the an average annual rate that is much first-ever, 3D-printed heart using a less — one-quarter the rate — of prices in patient’s own cells. While tiny, the same the overall economy. process could theoretically 3-D print a human-size heart. Think how that could Spending on advanced medical revolutionize transplants. technology has also remained virtually constant as a percentage of national Similarly, we are at the beginning of a health expenditures — at roughly digital transformation of health care. 6 percent or less — for decades. In Data-driven medical devices will be at fact, the percentage dropped to just the forefront of that transformation 5.2 percent by 2016, a 30-year low. collecting individual patient information For instance, major categories of that can be used to improve outcomes implantables have seen continued, and efficiency, better manage chronic substantial declines in average selling conditions, deliver more targeted prices on both a nominal and inflation- therapies and avoid hospitalizations. adjusted basis of late. In recent years the prices for artificial hips and knees Without question, the U.S. health have declined 23 and 18 percent, care system and systems worldwide respectively. face challenges. But I am optimistic that the innovation and value the And yet, as far as we have come, medtech industry routinely provides we have only just begun to explore will offer solutions to these challenges. the potential of medical technology The commitment, imagination and to combat disease and end human enthusiasm of the people in this suffering. The hallmark of our industry industry to improve people’s lives is is rapid innovation, building on the unmatched. We have done so much for successes that have come before patients; let’s do more.
37 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 38 GUEST PERSPECTIVE
John L i d d i c o a t , M . D . Executive Vice President and President, Americas Region, Medtronic
Medtronic is meeting partners where Partnerships powered by data and Collaborations they are on the journey toward VBHC technology and working together to develop We must combine our expertise in fueling the future solutions uniquely tailored to their medical technology design and delivery needs. Through in-depth discovery with the knowledge and insights of of health care sessions and multiyear program experts leading in other areas of health development, we’ve seen some of our care innovation. At the core of these At Medtronic, we are committed long-standing partners — including collective efforts to accelerate progress to transforming health care, but Maastricht University Medical Centre lies a common resource: data. Not we know we can’t do it alone. In in the Netherlands and Southlake just raw data, but actionable data that the journey toward delivering Regional Health Centre in Ontario — informs decisions. better patient outcomes, improving shift toward this new model to achieve access and lowering overall costs their goals. In the United States, Lehigh Medtronic Care Management Services of care, collaborations in risk-based Valley Health Network in Pennsylvania (MCMS) helps empower clinicians with contracting, operational alignment and is building out programs that could timely information that may help them data transparency are foundational revolutionize the way care is delivered, treat complex, chronic, co-morbid requirements. implementing risk-based contracts and patients by addressing risk factors unique care delivery models. before they lead to complications. Innovating to drive better value MCMS runs patient selection and Many large hospital systems are Through our Integrated Health risk stratification algorithms to help starting to make the shift toward value- Solutions (IHS) team, Medtronic works identify patient cohorts benefiting based health care (VBHC) models. with key hospital staff within developed most from remote monitoring. Once Private health plan industry leaders and emerging markets to identify root identified, MCMS begins the enrollment, like UnitedHealthcare, Cigna and Aetna causes, develop solutions and measure engagement, monitoring and care have accelerated the shift toward value- results of programs, protocols and management support services. We use based care, helping provide patients procedures. Horizon Health Network advanced data reporting and analytics with access to the latest in medical in New Brunswick, Canada, has seen to monitor program success factors technology and delivering savings to strong results from work that started such as patient engagement rates, the broader health care system through in 2016: six months in, the Heart reduction in hospitalization, time in innovative reimbursement models. Centre saw a 14% increase in operating range for specific biometrics and room capacity and a 44% reduction in other measures. average wait times.
39 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 40 Partnerships in the medical technology evolution with hospital leaders, technology experts, payers and health care innovators are key to making progress possible.
Over the past two years, Medtronic has physician training and collaboration, contracted with multiple health plans and have forged strong R&D that utilize our end-to-end offering partnerships with leading universities. in an at-risk business model. To date, Medtronic has enrolled more than From collaborations spanning the last 9,000 patients on the MCMS service seven decades, we’ve learned that and delivered 54,000 patient months partnerships that deliver clinical and of service. economic value:
Taking health care further, together • .Aren’t just about product innovation, Putting the full power of data and but process innovation, and technology into the transformation of building new ideas with inclusive, health care requires continuous input multidisciplinary teams. and feedback from stakeholders. • Require a willingness to share data and insights, sometimes without As we continue to explore the impact predefined outcomes or agendas. of data on the future of health care, our IT and Digital Health teams have • Take patience and persistence, created the Medtronic Hospital IT investing in quality to deliver Advisory Board. The group, made up of consistent, integrated care and better hospital CIOs, chief technology officers patient outcomes. and other IT stakeholders, meets As global health care evolves, it is our regularly with Medtronic to discuss the responsibility to evolve with it. We see challenges hospitals face related to data great opportunities ahead to help more and IT solutions. patients around the world. Partnerships in the medical technology evolution We also continue to seek out R&D with hospital leaders, technology partners who help us build patient- experts, payers and health care centric solutions. With 21 R&D global innovators are key to making facilities and more than 46,000 progress possible. patents, we are committed to ongoing
39 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 40 GUEST PERSPECTIVE
Dr. Mark Boxer Executive Vice President and Global Chief Information Officer, Cigna
have powerful artificial intelligence technologist, I fundamentally believe How data is (AI) tools and algorithms that enable that technology and innovation hold a data-driven model of whole person much promise to improve the system fueling a new population health. Data-based through sustaining, disruptive and initiatives built around neuro-computing quantum innovation. Innovation approach to hold the promise to transform care can provide the interconnectivity, even further. integration and intelligence to make whole person real and meaningful improvements Yet while we have access to data and to the system. Most importantly, with health analytics at scale, only about 50% more than 125 million Americans of the care in this country is based suffering from chronic illnesses, these As Bob Dylan famously wrote, “… the on scientific evidence rather than a innovations can improve the quality times they are a-changin’.” I would doctor’s personal preferences and of life. amend that slightly when it comes to background. Sadly, cost does not today’s health care ecosystem: the equate to quality. While the US spends When we apply technology that times they are a-changin’, massively. more per capita on health care than any connects consumers with care, and When we consider the significant other developed nation, our ranking on apply real-time insights and AI, we advances taking place in science and quality puts us near the bottom of the can move toward the “triple aim” technology, we cannot be anything but pack of industrialized countries. of improving quality, managing optimistic about a future where better affordability and optimizing the patient managing or even eradicating the high- We are seeing higher incidence of experience to ultimately deliver better cost, high-impact disease states, such chronic and lifestyle-based disease, health outcomes. as cancer, heart failure and diabetes, while the social determinants of health is a reality. Today we understand place underserved populations at the At Cigna, we are tackling these more about the underlying basis of highest risk. Treatment still focuses on challenges today and in the process disease than ever before and have the siloed episodes of care, rather than on redefining health care for the better. opportunity to apply targeted specialty holistic health and wellness. Our mission is quite clear: to improve therapies, personalized medicine and the health, well-being and peace of genomic therapeutics that dramatically Fortunately, our changin’ times mind of those we serve. We are using improve how we care for the sickest give us an opportunity to address data and analytics to make this a reality. of the sick. Over the next five years, these challenges. As both a public this will improve even further. We now health professional and a tenured
41 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 42 Our mission is quite clear: to improve the health, well-being and peace of mind of those we serve. We are using data and analytics to make this a reality.
Through the combination of Cigna information. This effort is not only government reform, globalization, and Express Scripts, we have access driving engagement, but also leading groundbreaking drug development, to longitudinal clinical data sources to greater customer satisfaction. delivery system consolidation and that are unmatched. For example, disruptive digital innovation. Cigna Cigna is using AI to predict whether One final example is Cigna’s launch stands ready to tackle all of these patients might abuse or overdose on of the first AI-driven, end-to-end challenges, and our data-first prescription opioids. Cigna’s proprietary stress management solution. This orientation holds the promise to algorithms are saving lives and is a completely new system where change health care for the better. decreasing the health care costs for stress can be detected in real time those patients. using biometric measurements from a wearable device and a machine Cigna has also developed a machine learning algorithm. We have developed learning-enabled tool called One a proprietary tool and set of measures Guide that analyzes data from medical that include facial movement emotional claims, medical procedures, biometric analysis, tone analysis and perceived data, benefits and pharmacy claims stress score. Based on these insights, to anticipate customer needs. For targeted interventions are introduced example, the tool can help identify before stress impacts whole person customers that have not used financial health. incentives for annual checkups or free health coaching. The tool creates It is clear that health care now, and personalized messages for customers, in the future, requires a different who are then notified through the orientation, different investments and myCigna mobile app. different skill sets. Health care leaders need to manage massive change; Other initiatives like Answers by Cigna, they need to be agile and flexible in an AI-enabled chatbot available on their approach; and they require a our leading mobile search platform, portfolio of skills that balance health use natural language processing to improvement and technology savviness, understand and respond to more along with a keen eye for the discipline than 150 common health and of data. The health care industry will coverage questions with personalized experience ongoing change, from new
41 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 42 GUEST PERSPECTIVE
Susan Tousi Senior Vice President, Product Development, Illumina
path to understanding the relationship System can produce 48 high-quality The end of data between a gene and biology or disease whole human genome sequences in was long and arduous, requiring highly about two days, which means a single for data’s sake complex laboratory work to find and instrument can read more than 5,000 map a few genes across a limited whole human genomes per year. This is is now: driving number of samples. Today’s genomic the genomic revolution. revolution is powered by genome the digital sequencing technology that reads Previously, gene mapping efforts were your DNA — whether you are studying so challenging and limited in size that transformation one gene or the entire genome — and an entire study could be managed in an of biology can be instrumental in identifying Excel spreadsheet. Today, our products everything from inherited disorders to are now among the largest generators through the characterizing genetic mutations that of data in the world, and that will drive cancer progression and tracking continue to accelerate. For example, establishment of disease outbreaks. this year our customers will generate as much data each quarter as in all “the internet Accelerating in the generation of of 2016. Our sequencing platforms digital health data generate about 100 petabytes of data of genomics” The time is right to transform health each year, which is about 25 times the care through genomic technology — a size of today’s entire Netflix catalog. vision Illumina has already begun The software code of life to realize with the launch of our As a leader in genomic sequencing, The human genome contains NovaSeq 6000 System. It provides we are leveraging our expertise in approximately three billion base pairs users with the throughput, speed technology and data science to enable of DNA, which is housed within the and flexibility required to complete genomics to improve lives and change depths of every one of your cells. Your genome sequencing projects faster and how health care is delivered. We genome is what makes you uniquely more economically than ever before. understand better than anyone that this you, through the translation of the DNA To put that in perspective, while the journey requires Illumina to continue code (genes) into proteins and other first human genome sequence ever to address cost and accessibility of molecules that act throughout the body. completed took a team of scientists genomic technology, but also to protect Genomics is the study of those genes roughly 10 years at a cost of nearly and standardize genomic data as a and what they do. Historically, the US$3 billion, each NovaSeq 6000 means to turn it into actionable and meaningful biological insights as quickly and as accurately as possible. 43 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 44 Integrating genomic data with other digital biology and clinical data is essential to drive the next wave of scientific breakthroughs and help develop the next generation of precision medicines.
We recognize that generating genomic applications, will lay the foundation data is only the first step in unlocking for more integrated and accessible the mysteries of biology, health and products to drive breakthrough disease. Integrating genomic data scientific discoveries and health with other digital biology and clinical care applications. data is essential to drive the next wave of scientific breakthroughs and Today, genomics is helping solve some help develop the next generation of of the most challenging problems of precision medicines. This requires a humankind and inspiring new hope for new model and software capabilities people around the world. We believe for biological data sharing and the Internet of Genomics has the interoperability across the spectrum capacity to connect genomic data and of basic, translational and clinical specialized analytics with personalized research. We must build the “Internet medical solutions, pharmaceutical drug of Genomics” to connect these rich development and much, much more, data streams, open up new analytical with the promise of insights to improve possibilities and usher in the era of human health in a way that transcends digitized biology. all previous digital revolutions.
Software is like oxygen to life. It creates a lot of opportunity and a lot of applications. To power the next generation of scientific inquiries and insights from genomic data, our team is developing Illumina’s Operating System (OS) to connect our smart sequencers to the internet, to each other and to our partners’ applications. We believe that the Illumina OS, coupled to a connected infrastructure for genomic data exchange with the ability to bring in complementary partners’ analysis
43 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 44 GUEST PERSPECTIVE
Abdul Hamid Halabi Director of Healthcare, NVIDIA
Starting in 2012, we saw a cascade Real-time 3D ultrasound was only The AI of amazing deep learning innovation. possible because that visualization It’s a method of machine learning, inventory was moved to GPUs. The fact opportunity in but a unique one, enabled especially that we’re inside all of these devices, by GPUs. Our platform is really well- inside data centers, that every cloud health care suited for it and we pounced on the provider has GPUs, makes this platform opportunity. Deep learning based on ubiquitous. Higher quality care, faster care, neural networks was historically very personalized care for all — AI has the difficult to execute because it required I think of software development in potential of changing the way health a lot of compute and time. We made it general as automation. AI is the care is practiced. As the Director for work for everybody. process of automating automation: Healthcare at NVIDIA, I work with an taking something and making it create inspiring ecosystem of academics, The reason NVIDIA is uniquely automation for itself. Where can this be startups, physicians and commercial positioned goes back to our history. We used in health care? Automating certain partners who share the goal of bringing made a conscious decision more than tasks for the physician is something AI to the industry and who are enabling 20 years ago to make sure that the that’s going to happen. We’ll also caregivers to add AI to the toolbox they interface of all NVIDIA GPUs would be increase quality of care by making sure use daily. the same. The involvement of NVIDIA there’s a computer as a second opinion. in health care, specifically, started back NVIDIA started in 1993 as a graphics with computation and simulation in Some of the most exciting use cases company. The graphics processing unit life sciences: when you’re simulating today are in the imaging world: in (GPU) we created was and is used to molecules in the body or trying to genomics, to accelerate analysis enable amazing experiences in gaming. model the HIV capsid, it requires a lot of and figure out mutations earlier; in It turned out that graphics capability compute. As a result, scientists moved drug discovery; and in EHR data, to was also an ideal platform to enable toward using the GPU. understand patterns of patients and faster computation in general. While figure out best care pathways. a CPU can do a few tasks in parallel, On the medtech side, we were a GPU can do many thousands. As a embedded from the beginning Another exciting area is intelligent result, many supercomputers today are inside instruments like CT, MRI and instruments. NVIDIA has partnered full of GPUs. ultrasound. Today, it’s very difficult to with some of the leading instrument come by a CT machine without multiple manufacturers to incorporate AI into GPUs inside for image reconstruction. their products. It’s not only making
45 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 46 Higher quality care, faster care, personalized care for all — AI has the potential of changing the way health care is practiced.
these instruments smarter, faster and industries we work in and the fact more reliable, but it is also making that we can bring knowledge from them more portable and mobile. other industries like autonomous Doctors don’t have the capacity to give vehicles, robotics and smart cities into consultations around the world. AI can health care. take their knowledge and transform it into tools that other physicians can use We also built a consortium of amazing to expand access to care. With enough hospitals, including Massachusetts examples, the computer figures out General Hospital, King’s College things even you didn’t know — that’s the London, Mayo Clinic and others, so that big revolution with deep learning. their doctors are able to contribute to the creation of these algorithms. And To make AI work, the whole ecosystem as we get into that regulatory side, has to get together, because it’s the latest thing we did was deepen our a different way of doing business. partnership with the American College Everybody needs to be involved, of Radiology. We formed a consortium starting with the research community. with them and seven other hospitals to Today, more than 70% of medical show that this is doable. We need the imaging research is using deep whole ecosystem to move together. learning, and we work closely with this community using our AI platform. What I’m most excited about is the We also have about 400 health care prospect of seeing the unseen; doing startups we’re working with closely on things we haven’t done in the past, AI. Together, they’ve raised more than bringing sciences together so that US$4 billion. we finally can actually provide the precision medicine that people need. We work with the leading instrument There is an unbelievable opportunity for manufacturers and leading societies AI in health care. like the American College of Radiology to help them build their AI platforms. We bring a unique perspective they like because of the diversity of the
45 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 46 GUEST PERSPECTIVE
Wende Hutton General Partner, Canaan Partners
EY: What do you see as the main EY: What is it that’s limiting the way we’ve re-engineered the regulatory characteristics of this investment opportunities for early-stage medtech, side, in partnership with the FDA. To climate at the moment within medtech? from an investor’s perspective? drive new codes with the AMA is very difficult and very expensive. After Wende Hutton: There are probably Wende Hutton: The cycle of innovation you get a new code, the timeframes three major themes in the medtech has not just stood still; there are to drive approval through Medicare, venture capital world. First, the entrepreneurs and innovations plans and insurers is a whole other venture community is somewhat more occurring that need to be brought cycle. For a small company that optimistic than it has been in the last forward. There are still unmet clinical has a single product, this can be a four or five years, where medtech needs. What we look for is market five- or six-year timeframe. It is very investing had moved out of favor. In opportunities that have the potential protracted and very expensive. Overall, the last 12 months there’s been some for worldwide crest at US$1 billion. the reimbursement climate is very rotation of venture capital back into Those are really hard to find in daunting. medtech; some renewed optimism that devices; by the time you’ve narrowed there are opportunities in medtech. down a label to go to FDA, those Second, there are few exit opportunities US$500 million—US$1 billion revenue on the acquisition side because of the Second, if you’re a life sciences fund opportunities are few and far between. consolidation in the industry. Most or investor, the returns profile — in of the big strategic medtech players terms of the number AND the scope of Valuations have improved in this space, have been slow to use their balance opportunities — we think still pales in and that has made these companies sheets to buy companies before they comparison to biopharma. more attractive. But two big issues see the reimbursement cycle being still create significant headwinds when driven through that pipeline. That has Third, there is still a dearth of you’re talking about series A or series B made financial returns very difficult to syndication partners because so many investment. First, the more innovative achieve, because of the slow nature of life sciences funds have permanently the technology — or the change in the exits. rotated out of the sector. business model that technology might drive — the more you fall into new You can make really good money in So, it is still a careful walk if you’re an CPT codes, uncharted pathways on medtech investing but it must be very early-stage venture investor to find reimbursement. Which, by definition, selective to work around those two the right kind of opportunities with the still require a three- to four-year dynamics. right potential exit scenarios, with the timeframe; we’ve been unable to re- right syndicate partners. engineer reimbursement in the same
47 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 48 Companies that are at the forefront of interoperability are starting to take market share away from companies that are wedded to a proprietary siloed approach.
EY: Do you see much opportunity for distribution has become much more On the positive side, a company like digital health companies, and what challenging. And the provider side Dexcom or Insulet has decided to get challenges will they face in cutting has put up value-added technology in front by saying our physician through to the market? assessment committees, so you also customers really do want have to get through that barrier; you’re interoperability of device data and Wende Hutton: We do think there’s now dealing with HIPAA compliance, want to enable patients sharing what’s an opportunity for small companies to and cannot always go elbow to elbow coming off the continuous glucose innovate in the digital health area. It with the surgeon in the OR to train and monitoring or pump. They’re very is a very interesting opportunity and, discuss and determine if this device partnership-oriented and focused on certainly, a swim lane we stepped into is appropriate for their practice. A the need to integrate into the flow with Glooko and Chrono Therapeutics. startup can’t deploy 10 reps against of devices. Companies that are at In an area dominated heavily by 400 reps and ever hope to gain access the forefront of interoperability are franchise players that have large to that conversation. Hospitals have starting to take market share away market shares, what Glooko has done put hurdles in the road that have made from companies that are wedded to a is partner up with several significant it very difficult for innovators to get proprietary siloed approach. players in diabetes to solve providing access to physicians. patient device data efficiently to Interoperability is also where physicians providers and patients. We’re integrated EY: You mention Glooko being who are at the forefront of quality with more than 170 devices. All those integrated with many other devices. metrics and quality outcomes for alliances and partnerships are with How important will interoperability be improved care want to drive the established players and the only way it’s for medtech in future, and have the integrated delivery system. So, if we, possible for a company like a Glooko to leading medtechs been slow to push for the industry side, are trying to address succeed in an area like diabetes interoperable systems? what leading clinicians need, we need and drive key insights for improved to provide this interoperability, provide patient care. Wende Hutton: They’re very steeped in data off of connected devices and give a tradition of proprietary silos. Where clinicians that data in a format they One of the interesting dynamics the industry has come from is: if I can can use seamlessly. The health care in medical devices overall is that it put a proprietary three-pronged plug in system can only benefit from a used to be possible, 10 to 15 years a connector, I will make that unable to frictionless way to access useful, ago that a startup could hire a direct be accessed by anyone unless they buy real-world patient data. sales force, go into the hospital or the my proprietary device. That’s a mind- clinic and sell. With the consolidation, set that is very embedded.
47 | Pulse of the industry 2019 — Guest perspective Pulse of the industry 2019 — Guest perspective | 48 FINANCIAL PERFORMANCE or FINANCING or M&A Chart or graph Titles Databook
2018’s 7% revenue “growth was the highest since the financial crisis, though still well below the pre-crisis average of nearly 15%.
49 | Pulse of the industry 2019 — Databook PulsePulse of of the the industryindustry 2019 — Databook | 50 51 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 52 FINANCIAL PERFORMANCE Medical technology at a glance (US$ billion, data for pure-plays except where indicated)
Public company data 2018 2017 Change % change
Revenues $ 407.1 $ 379.7 $ 27.3 7%
Conglomerates $ 171.9 $ 163.6 $ 8.3 5%
Pure-play companies $ 235.1 $ 216.1 $ 19.1 9%
Commercial leaders $ 217.6 $ 199.0 $ 18.6 9%
Noncommercial leaders $ 17.6 $ 17.1 $ 0.4 2%
R&D expense $ 17.8 $ 15.9 $ 1.8 11%
SG&A expense $ 82.6 $ 72.5 $ 10.0 14%
Net income $ 20.3 $ 15.0 $ 5.3 36%
Market capitalization $ 1,056.7 $ 927.5 $ 129.3 14%
Number of employees 857,900 809,700 48,200 6%
Number of public companies 446 427 19 4%
Source: EY, Capital IQ and company financial statement data. Numbers may appear to be inconsistent due to rounding. Data shown for US and European public companies. Market capitalization data is shown for 31 December 2018 and 31 December 2017.
Positive revenue, income and R&D performance • 2018’s 7% revenue growth was the • Though medtech returned more cash highest since the financial crisis, to shareholders than it invested in though still well below the pre-crisis R&D in 2018, R&D spending still grew average of nearly 15%. 11% compared with 2017. Top leaders in total R&D growth spending included • Net income surged 36%, driven by Thermo Fisher Scientific (driven by increases of more than US$1 biilion previous M&As), as well as Intuitive for Stryker, Medtronic and Boston Surgical and Edwards Lifesciences, Scientific. However, nearly all of the two organizations that have invested gains were the result of tax benefits, heavily in their respective robotic divestiture adjustments, adjustments surgical and cardiovascular-focused to foreign currency and other one- technologies. time charges. Without these one-time events, net income growth would have been in the low-to-mid single digits.
51 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 52 FINANCIAL PERFORMANCE US and European medtech market capitalization relative to leading indices
E e tech co ercial lea ers E e tech nonco ercial lea ers oc Health i ital Health ublic Co any n e Bi har a N biotech Co osite broa er in ices
ource: E an Ca ital Charts inclu es co anies that were acti e on 31 uly 2 19 Co osite broa er in ices re ers to the aily a era e o lea in an Euro ean in ices: ussell 3 ow ones n ustrial era e N E 5 C C 4 an T E 1
53 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 54 E e tech co ercial lea ers E e tech nonco ercial lea ers oc Health i ital Health ublic Co any n e Bi har a N biotech Co osite broa er in ices
Medtech and digital health valuations outperform other life sciences sectors
• Despite concerns about its investment
in future growth, medtech has continued to attract investor attention with the industry’s cumulative public valuation soaring 38% since the beginning of 2018. • Medtech’s valuation growth surpassed that of both biotech (-1%) and big pharma (4%) and easily outpaced the broader US and European indices (3%). Digital health company valuations grew at essentially the same pace (39%) as medtech. • Investors’ positive view of medtech is likely to be informed by a number of factors, including the relative lack of political pressure on medical device
pricing (by contrast to the tensions in the ongoing biopharmaceutical pricing debate). Fundamentally, investors recognize that connected devices and the data they produce will be critical for the consumer driven, value-based health ecosystem of the future.
ource: E an Ca ital Charts inclu es co anies that were acti e on 31 uly 2 19 Co osite broa er in ices re ers to the aily a era e o lea in an Euro ean in ices: ussell 3 ow ones n ustrial era e N E 5 C C 4 an T E 1
53 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 54 FINANCIAL PERFORMANCE Top 10 changes in market capitalizations, H2 2014–H1 2019 (US$ million)
Market cap Market cap Market cap Company CAGR 30 June 2019 1 July 2014 change
Thermo Fisher Scientific* 117,466 47,458 70,009 20%
Medtronic* 130,615 63,639 66,976 15%
Intuitive Surgical 60,559 15,611 44,948 31%
Becton Dickinson* 67,975 23,142 44,833 24%
Stryker 76,703 32,413 44,290 19%
Boston Scientific 59,770 17,182 42,589 28%
Essilor International* 56,797 22,491 34,306 20%
Illumina 54,118 23,459 30,659 18%
Edwards Lifesciences 38,519 9,193 29,326 33%
Align Technology 21,897 4,683 17,215 36%
Source: EY, Capital IQ and company financial statement data. CAGR = compounded annual growth rate *Companies that have used large M&As to drive their growth.
Big acquisitions drive bulk of major market cap changes
• Significant acquisitions helped spur three of the four largest gains in companies’ market capitalizations in the past years. • Thermo Fisher Scientific had the largest value change in market cap as of June 2019; its capitalization increase was driven by a combination of acquisitions, especially the 2017 acquisition of Patheon for US$7.2 billion, and organic growth. Medtronic (Covidien in 2015) and Becton Dickinson (CR Bard in 2017) market values grew thanks to megadeals. • Powered by the continued strength of its da Vinci Surgical System, Intuitive Surgical enjoyed the largest organic growth (US$45 billion) among all medtechs. While the market for robotic surgical systems is expected to significantly expand over the next decade, competition among peers is also expected to increase as medtech majors such as Johnson & Johnson and Medtronic enter the space via acquisitions.
55 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 56 FINANCIAL PERFORMANCE US and European commercial leaders
US$0.5 billion–US$1 billion US$1.5 billion US$2.5 billion US$2.6 billion–US$5 billion US$6 billion US$10 billion >US$10 billion
US US
Source: EY, Capital IQ and company financial statement data. Commercial leaders are pure-play companies with revenues in excess of US$500 million.
Increased number of commercial leaders drive revenue growth
• There were 64 commercial leaders in • Essilor became the fifth medtech Alere’s rapid diagnostic testing US and European medtech in 2018, to amass more than US$10 billion solutions in 2018, also joined the up from 62 in 2017, despite Becton in annual revenues, following its list, posting an 88% year-over- Dickinson’s acquisition of CR Bard. The acquisition of Luxxotica, while Thermo year increase in revenue growth. continued maturation of the industry Fisher Scientific joined Medtronic and In all, these three newcomers is good news for younger medtechs Johnson & Johnson in passing the contributed just 9% of the commercial that rely on more established US$20 billion revenue marker. leaders’ total revenue growth of counterparts for exits and financings. US$18.6 billion. • Cardiac implant company, Abiomed, • Pure-play companies outperformed and Insulet, maker of the Omnipod conglomerates, with revenue diabetes platform, appear among increases of 9% vs. 5%. Commercial the commercial leaders for the first leaders accounted for nearly two- time this year through strong organic thirds of medtech’s total revenue growth. Diagnostic health care growth of US$27 billion. manufacturer, Quidel, which acquired
55 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 56 FINANCING Capital raised in the US and Europe by year
ebt ollow on an other O Venture
US US
ource: E BMO Ca ital Mar ets ow ones Venture ource an Ca ital Nu bers ay a ear to be inconsistent because o roun in ri ate in est ents in ublic e uity Es inclu e in ollow on an other
Venture investment reaches record levels, but overall financing falls • Total industry financing fell for the least a decade, and well under the • On the positive side, venture second year running, down 15% to US$20.9 billion annual average seen investment inched up 2% to a record US$31.3 billion, below the aggregate during that same period. While large US$8.5 billion, while public follow- average of US$37.5 billion from the M&A have been behind a significant on financing levels increased 27% previous five years; innovation capital portion of debt activity the past to US$7.7 billion, as the number of (capital raised by companies with less several years, there was also a US$100 million follow-ons jumped than US$500 million in sales) slipped significant drop of small debt offerings from 9 to 13 year-over-year. Even the 13%, to US$18.9 billion. However, this this past year. The number of debt 21% drop in IPO values had a silver total accounted for 60% of the total offerings greater than US$250 million lining. financing, the highest percentage in at dropped from 18 in both 2016-17 and • US medtechs accounted for 87% of the least a decade. 2017-18 to just 5 in 2018-19. With total US and European financing, up borrowing rates still hovering near • The decline in total financing was from 73% over the previous 12-month historic lows, was this drop an early largely the result of a 38% decrease period. warning sign of a cooling off period, or in debt offerings. The US$10 billion will it merely be a one-year anomaly? raised in debt was the lowest in at
57 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 58 FINANCING US and European early-stage VC rounds >US$5 million
Number of early-stage VC rounds Percentage of VC investment going to early-stage medtechs P VC VC P
VC
ource: E ow ones Venture ource an Ca ital Early-stage rounds are seed-, first- and second-round VC investments.
Early-stage venture capital surges
• While total venture capital funding only grew by 2%, early- stage venture financing skyrocketed 33% to US$4.4 billion; the number of early-stage VC rounds also reached at least a 10- year high of 172, up from 168 the year before, and a decade average of 96. • In all, 52% of all venture dollars went to early-stage investment, up from 40% the year before; the 52% is also at least a decade- long high, as the cumulative average was 31%. • Outside of the “other” category (24%), non-imaging diagnostic companies once again attracted the most amount of early- stage capital (22% of total), followed by imaging (15%), and therapeutic devices — cardiovascular/vascular (7%).
57 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 58 FINANCING Top US and European venture rounds, July 2018–June 2019
Gross raised Company Region Product type (disease) Quarter Round type (US$ million) US-Northern Verily Life Sciences Other 1,000 Q1 2019 Early stage California SmileDirectClub US-Tennessee Therapeutic devices (dental) 380 Q4 2018 Early stage Butterfly Network US-Connecticut Imaging 250 Q3 2018 Early stage US-Northern Auris Health Therapeutic devices (oncology) 220 Q4 2018 Late stage California US-Northern Therapeutic devices Outset Medical 132 Q3 2018 Late stage California (hematology/renal) Thrive Earlier US-Massachusetts Non-imaging diagnostics 110 Q2 2019 Early stage Detection US-Northern Click Diagnostics Non-imaging diagnostics 101 Q2 2019 Late stage California US-Southern Therapeutic devices Acutus Medical 100 Q2 2019 Late stage California (cardiovascular/vascular) GC Aesthetics Ireland Therapeutic devices (aesthetics) 97 Q4 2018 Late stage US-Northern Therapeutic devices (ear, EarLens 87 Q4 2018 Late stage California nose and throat) US-Northern uBiome Non-imaging diagnostics 83 Q3 2018 Late stage California Nuvaira US-Minnesota Therapeutic devices (respiratory) 79 Q1 2019 Late stage US-Northern Therapeutic devices Ablative Solutions 77 Q1 2019 Late stage California (cardiovascular/vascular) US-Northern Therapeutic devices Gynesonics 75 Q1 2019 Late stage California (women’s health) NorthStar Medical US-Wisconsin Imaging 75 Q2 2019 Early stage Radioisotopes BioSerenity France Non-imaging diagnostics 73 Q2 2019 Early stage MeMed Diagnostic Israel Non-imaging diagnostics 70 Q3 2018 Late stage
Source: EY, Dow Jones VentureSource and Capital IQ.
Tech giant leads venture financing rounds • Imaging and non-imaging diagnostics medtech space. This latest round • The cardiovascular therapeutic area accounted for 7 of the top 15 funding comes two years after Singapore- led the therapeutic devices segment rounds in the US and Europe, signaling based Temasek invested US$800 in terms of number (66) and value the growing focus on data capture and million in Verily. Verily maintains (US$798 million) of venture capital personalization. partnerships across the health deals this year, though only Acutus and life sciences sector in areas Medical and Ablative Solutions, which • Verily Life Sciences, the life sciences ranging from diabetes management both develop ablation systems for arm of Alphabet, raised US$1 billion to surgical robotics. The company hypertension, garnered enough to in fresh capital from private equity often provides the technical talent, make the leader board. firm Silver Lake and other investors. while counterparts in health care The round was the largest VC round, bring clinical research and regulatory affirming the continued high potential expertise. for technology entrants into the
59 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 60 FINANCING US and European medical technology IPOs
Nu ber o eals Ca ital raise
IP
US US
ource: E BMO Ca ital Mar ets an Ca ital
Smaller IPO class attracts significant amount of capital
• Although the total value of IPOs fell US$1.8 billion total surpassed that • Every US medtech’s IPO either priced 21%, the US$5.1 billion raised in 2018- of 2017-18 (US$1.3 billion), as well within or above its expected price 19 was still the second highest IPO the US$1.1 billion average over the range. These accurate valuations value in the past decade. previous 15 years. and the high number of exercised overallotments were signals of • Of the US$6.5 billion raised in • The total number of IPOs dropped strength for these companies and 2017-18, US$5.2 billion (80%) from 28 to 16 — the lowest figure in their investors. was generated by the Siemens five years; however, the average size Healthineers IPO; discounting both of US$120 million (even when omitting the Siemens offering and Avantor’s Avantor) was the second highest in at US$3.3 billion IPO this year, 2018-19’s least 15 years.
59 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 60 FINANCING US and European IPOs, July 2018–June 2019
Gross raised Company Ticker Region Product type (disease) Quarter (US$ million) Avantor AVTR US-Pennsylvania Research and other equipment 3,333 Q2 2019
Medacta MOVE Switzerland Therapeutic devices (orthopedic) 590 Q2 2019
Guardant Health GH US-Northern California Non-imaging diagnostics 273 Q4 2018
Therapeutic devices Silk Road Medical SILK US-Northern California 138 Q2 2019 (cardiovascular/vascular)
Axonics Modulation Therapeutic devices AXNX US-Southern California 138 Q4 2018 Technologies (urology/pelvic)
SI-BONE SIBN US-Northern California Therapeutic devices (orthopedic) 124 Q4 2018
Therapeutic devices ShockWave Medical SWAV US-Northern California 111 Q1 2019 (cardiovascular/vascular)
TransMedics Group TMDX US-Massachusetts Other 105 Q2 2019
Ra Medical Systems RMED US-Southern California Therapeutic devices (multiple) 76 Q3 2018
Avedro AVDR US-Massachusetts Therapeutic devices (ophthalmic) 70 Q1 2019
Vapotherm VAPO US-New Hampshire Therapeutic devices (respiratory) 64 Q4 2018
Sequana Medical SEQUA Belgium Therapeutic devices (multiple) 31 Q1 2019
Bionano Genomics BNGOU US-Southern California Research and other equipment 21 Q3 2018
OssDsign OSSD Sweden Therapeutic devices (orthopedic) 16 Q2 2019
NeoDynamics NEOD Sweden Non-imaging diagnostics 6 Q4 2018
S2Medical S2M Sweden Therapeutic devices (multiple) 4 Q4 2018
Source: EY, BMO Capital Markets and Capital IQ.
61 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 62 FINANCING Capital raised by leading US regions excluding debt, July 2018–June 2019
Northern Cali ornia
ennsyl ania
outhern Cali ornia Minnesota Te as
Total e uity billion ca ital raise Total Massachusetts
srael
Venture ca ital raise billion New or state New ersey
ource: E BMO Ca ital Mar ets ow ones Venture ource an Ca ital Size of bubbles shows relative number of financings per region.
California and Massachusetts still dominate medtech venture capital
• Northern California again dominated the financing landscape in terms of total rounds (120), total equity raised (US$4.6 billion) and total venture raised (US$2.8 billion). • As in previous years, Massachusetts (US$812 million) and Southern California (US$687 million) were a distant second and third, respectively, in venture capital raised, while Israel once again achieved the top spot in Europe with US$468 million. • Driven by the US$3.3 billion Avantor IPO, Pennsylvania raised the second highest total financing (US$3.6 billion), followed by Southern California (US$1.5 billion). • Swiss-based companies led total financing in Europe with US$840 million.
61 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 62 M&A Select US and European M&As, July 2018–June 2019
Acquiring Acquired Value Location Location Buyer’s deal driver company company (US$ million) US-District of GE Healthcare Build scale (research Danaher US-Massachusetts 21,400 Columbia (biopharma division) and other equipment) 3M: Health Care US-Minnesota Acelity US-Texas 6,725 Build scale (wound care) Johnson & Johnson Diversification US-Ohio Auris Health US-California 5,750 (Ethicon) (surgical robotics) Build scale Boston Scientific US-Massachusetts BTG UK 4,240 (cardiovascular/vascular) Colfax US-Maryland DJO Global US-California 3,150 Diversification (orthopedic) Grifols Diagnostic Geographic expansion Grifols Spain US-California 1,930 Solutions (hematology/renal) Diversification Medtronic Ireland Mazor Robotics Israel 1,700 (surgical robotics) Thermo Fisher US-Massachusetts Brammer Bio US-Massachusetts 1,700 Build scale (services) Scientific Stryker US-Michigan K2M US-Virginia 1,400 Build scale (orthopedic) Build scale (research Illumina US-California Pacific Biosciences US-California 1,200 and other equipment) Diversification (non- Astorg Partners France Nemera France 1,150 disease specific) Thermo Fisher Diversification (research PHC Holdings Japan Scientific (pathology US-Massachusetts 1,140 and other equipment) business) ResMed US-California MatrixCare US-Minnesota 750 Build scale (health IT) Build scale (regenerative Smith & Nephew UK Osiris Therapeutics US-Maryland 659 medicine) Build scale and geographic Amplifon UK GAES Group Spain 617 expansion (ENT)
Source: EY, Capital IQ and Thomson ONE.
Assets beyond therapeutic devices were highly targeted • GE Healthcare’s Biopharma portfolio • Sixty percent of the year’s largest Medtronic are attempting to close the of instruments, consumables and M&As targeted assets outside of the gap with other players like Intuitive software, which support the research, traditional therapeutic device focus, Surgical and Stryker. discovery, process development including companies focused on • Boston Scientific was the most and manufacturing workflows of surgical robotics, life sciences tools, active acquirer, announcing seven biopharmaceutical drugs, aligned with services and health IT. transactions valued at US$6.4 billion. Danaher’s long-held goal of increasing • Both Johnson & Johnson and These deals spanned assets in the recurring revenue in life sciences. The Medtronic were just the latest cardiovascular/vascular, oncology and February 2019 deal was the year’s companies making substantial orthopaedic fields and solidified the largest to date and illustrates the investments in surgical robotics with company’s foothold in these spaces. importance of placing strategic bets. their respective acquisitions of Auris In an effort to further optimize their • Led by 3M’s purchase of Acelity Health and Mazor Robotics. Johnson portfolio, Danaher also announced the (private consortium led by Apax & Johnson also purchased French eventual spin-out and IPO of Envista, Partners), private equity was once Surgical surgery company Orthotaxy a collection of three existing dental again active in 2018-19. Four of the in February 2019, and continues its businesses. top 12 deals (US$12.1 billion) involved partnership with Verily Life Sciences a PE as either a buyer or a seller. on Verb Surgical. Both J&J and 63 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 64 M&A Milestone payments in US and European medtech M&A
Nu ber o eals with ilestones Nu ber o eals with ilestones total nu ber o eals
P P
ource: E Ca ital an Tho son ONE
63 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 64 M&A Milestone share in US and European medtech M&A
Total alue o ilestones Total alue o ilestones total alue o all eals with ilestones
S S
T T US
ource: E Ca ital an Tho son ONE
Milestone values soar in medtech deals
• Milestone-driven deals were less prominent in 2018–19 than in years past when analyzed by deal number (19 vs. 23) and as a percentage of all deals (13% vs. 17%). • Mainly driven by Johnson & Johnson’s (Ethicon) acquisition of Auris Health (US$2.35 billion potential milestone), the total amount of milestones increased 81% in 2018-19 to US$3.7 billion, the highest in at least five years. • Excluding the Johnson & Johnson/Auris Health transaction, average potential milestones for medtech deals were US$74 million, below the US$97 million average seen the previous two years.
65 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 66 M&A US and European M&A by type of buyer
Other ri ate e uity har a Con lo erate Me tech
S
ource: E Ca ital an Tho son ONE
With medtech buyers reluctant, PE and pharma step in
• The past two years have witnessed the continuing diversification of medtech M&A buyers; pure-play medtechs represented only 45% of the total deal value, down from 62% in the previous two-year period. • With medtechs reluctant to acquire, private equity has returned to fill the gap, funding nearly 8% (US$8.4 billion) of deals. PE buyers featured in 3 of the year’s largest 12 deals. • Pharma companies were also major buyers, accounting for 11% of the year’s M&A deals as measured by deal value. From July 2015-June 2017, pharma buyers were responsible for 3% of medtech deal spending and just 1% from July 2013 to June 2015. • In all, 30% of the total M&A value came from buyers outside the medtech sector (traditional pure-play or conglomerate).
65 | Pulse of the industry 2019 — Databook Pulse of the industry 2019 — Databook | 66 Scope of this report
67 | Pulse of the industry 2019 Defining medical technology In addition to product groups, this report In this report, unless otherwise noted, tracks the performance of conglomerate medical technology (medtech) companies Conglomerate companies companies that derive a significant part of are defined as companies that design their revenues from medical technologies. United States and manufacture medical technology Although we classify conglomerate equipment and supplies and are • 3M: Health Care medtech divisions by product group headquartered within the United States or • Abbott: Diagnostic, Cardiovascular, (e.g., GE Healthcare into “Imaging” and Neuromodulation and Other Europe. The definition includes therapeutic Allergan into “Therapeutic devices”), • Agilent Technologies: Life device, diagnostic, drug delivery and we report their results separately from Sciences & Applied Markets and analytical/life sciences tools and digital pure-play companies. This is because, Diagnostics & Genomics health companies. The definition excludes excepting revenue results, conglomerates • Baxter International: Renal distributors and service providers, such do not report full financial numbers for Care, Medication Delivery as contract research organizations or and Advanced Surgery their medtech divisions. contract manufacturing organizations. • Corning: Life Sciences All publicly traded medtech companies For the purposes of this report, the • Danaher: Life Sciences, are classified as belonging to one of five “global” data represent combined Diagnostics and Dental • General Electric: GE Healthcare broad product groups: metrics from US and European medtech • IDEX: Health & Science companies; Israel’s data are analyzed • Imaging: companies developing • Johnson & Johnson: Medical as part of the European market. Foreign products used to diagnose or monitor Devices & Diagnostics exchange rates converted from local conditions via imaging technologies, currencies to US dollars are calculated on Europe including products such as MRI a blended annual rate. Where possible, • Agfa-Gevaert: Agfa HealthCare machines, computed tomography (CT) data are analyzed across a range of • Allergan: Medical Devices and X-ray imaging equipment, and dimensions including product group • Zeiss: Carl Zeiss Meditec optical biopsy systems (e.g., “Imaging” or “Therapeutic device”), • DSM: Medical • Non-imaging diagnostics: companies therapeutic area focus (e.g., “Oncology” • Dräger: Medical developing products used to diagnose or “Cardiovascular”), company ownership • Eckert & Ziegler: Medizintechnik or monitor conditions via non-imaging (e.g., public or private) and revenue • Fresenius: Medical Devices technologies, which can include patient thresholds. Our taxonomy sometimes • GN Store Nord: ReSound monitoring and in-vitro testing equipment segregates companies into thinly • Halma: Medical populated categories, making it difficult to • Jenoptik: Medical Technology • Research and other equipment: provide statistically significant results. • Merck KGaA: MilliporeSigma companies developing equipment • Novartis: Alcon Surgical used for research or other purposes, As part of the dealmaking evaluation, the • Royal Philips: Philips Healthcare including analytical and life sciences EY analysis tracks the digital alliances • Lumibird Group: Quantel Medical tools, specialized laboratory equipment and acquisitions signed by leading pure- • Roche: Roche Diagnostics and furniture play and conglomerate medtechs by • Sanofi: Genzyme Biosurgery therapeutic area, technology capability • Semperit: Sempermed • Therapeutic devices: companies (e.g., sensors or artificial intelligence) and • Siemens: Siemens Healthineers developing products used to treat strategic purpose. Direct investments by • Smiths Group: Smiths Medical patients, including therapeutic medical medtechs in digital health companies have devices, tools or drug delivery/infusion been excluded from this analysis. technologies
• Other: companies developing products that do not fit in any of the above categories; digital health companies are categorized in this product group
Pulse of the industry 2019 — Scope of this report | 68 Contact us
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69 | Pulse of the industry 2019 — Contacts Pulse of the industry 2019 — Contacts | 70 Acknowledgments
71 | Pulse of the industry 2019 — Acknowledgments Project leadership Data analysis James Evans, Health Sciences & Sakoon Khanna collected, organized Wellness Senior Analyst. As lead and analyzed the research included in Acknowledgments author of the report, he was this year’s report. She was assisted by responsible for the main article Tanya Mehra. and the guest perspectives. Jason Hillenbach and Rajni Sadana Rajni Sadana, Health Sciences & conducted fact-checking and quality Wellness Analyst, wrote “Robotic review of the numbers presented in surgery: an emerging battleground” the publication. and “Acquisitions and innovation in the Asia-Pacific market.” Editing assistance Jason Hillenbach, Health Sciences & Scott Chapski and Scott Daniels copy Wellness Knowledge Leader, led the edited and proofread the publication. analysis of industry trends, developed Their patience, hard work and attention the data book and provided project to detail were unparalleled. management over the entire report.
Ellen Licking, Health Sciences & Wellness Lead Analyst, served as Design managing editor. Bernadette Cacanando served as the art director and lead designer Ellen, James and Jason would like to for this project — her first time recognize Pamela Spence, EY Global supporting Pulse. This publication Health Sciences & Wellness Leader, would not look the way it does and James Welch, EY Global Medtech without her exceptional creativity. Leader, for their strategic guidance and editorial contributions. PR and marketing Katie Costello and Maya Vautier led the marketing and public relations efforts.
Pulse of the industry 2019 — Acknowledgments | 72 EY | Assurance | Tax | Transactions | Advisory
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