MAR­KET OUT­LOOK AND GROWTH SEG­MENTS

BioSpectrum (Asia) - - Cover Story - Source- Frost & Sul­li­van, Mar­ket In­sight

APAC’s age­ing pop­u­la­tions and chang­ing epi­demi­o­log­i­cal trends cre­ate de­mand for new types of di­ag­nos­tic tests and busi­ness mod­els, of­ten tai­lored specif­i­cally to in­di­vid­ual coun­tries and cul­tures. Kuldeep Singh, CEO, Bio­four­mis says, “We see the in­ter­est from payer and providers to as­sess new in­no­va­tive meth­ods to de­ploy and en­hance med­i­cal di­ag­nos­tics. China has a huge po­ten­tial with a vi­brant in­dus­try. Ma­ture mar­kets like Aus­tralia, where gov­ern­ment pol­icy and fund­ing re­form is in­cen­tivis­ing pre­ci­sion medicine; Tel­cos are in­vest­ing mil­lions to in­crease cover­age to all cor­ners of the coun­try; in­sur­ers are in­vest­ing in new mem­ber health ser­vices that ben­e­fit greatly from en­hanced di­ag­nos­tic ca­pa­bil­ity and the pop­u­la­tion is one of the high­est tech­nol­ogy adopters, pro­vides sig­nif­i­cant op­por­tu­nity for re­search and de­vel­op­ment and new com­mer­cial part­ner­ships.”

New tech­nolo­gies power some of th­ese in­no­va­tions. Lab au­toma­tion tools, for ex­am­ple, are bring­ing ef­fi­cien­cies to re­gions suf­fer­ing from work­force short­ages and skills gaps. Point-of­care di­ag­nos­tics are in­creas­ing ac­cess to test­ing in re­mote ar­eas. And im­prove­ments in con­nec­tiv­ity are en­sur­ing that the data from all th­ese tech­nolo­gies are col­lected and an­a­lysed, open­ing new pos­si­bil­i­ties for med­i­cal re­search and pop­u­la­tion health man­age­ment.

Lo­cal­i­sa­tion will be key to en­sur­ing that th­ese new tech­nolo­gies are ef­fec­tively de­ployed in Asia- Pa­cific. Also, di­ag­nos­tic ser­vices may need to be re­cal­i­brated to meet the price points of low-re­source set­tings. Ex­plain­ing the var­i­ous pric­ing mod­els that di­ag­nos­tic and med­i­cal de­vices fol­low, Kuldeep says, “Bundling and vol­ume dis­count­ing are com­mon. Of­ten there is a back­end sys­tem/ma­chine needed to read/an­a­lyse/ re­port data from the point of care de­vice. Dis­count­ing of the ini­tial set up cost is com­mon pro­vid­ing there is guar­an­teed vol­ume turnover. Rev­enue is of­ten gen­er­ated through fixed costs af­ter sales ser­vice fees, ex­tended war­ranties and re­place­ment sched­ules. Fu­ture out­look for shifts to­wards more out­come based pric­ing may af­fect the de­vice in­dus­try and their pric­ing mod­els will need to adapt ac­cord­ingly.”

Asia has an ex­quis­ite emerg­ing R&D ecosys­tem. This has led to pro­duc­ing more of its own IVD prod­ucts and ser­vices. Coun­tries like China, Ja­pan and Sin­ga­pore are go­ing be­yond lo­cal­i­sa­tion and play­ing a grow­ing role in break­through in­no­va­tion.

Can­cer di­ag­nos­tics is one of the main area of fo­cus and has wit­nessed sub­stan­tial in­vest­ment and M&A ac­tiv­ity in the past year. In March 2017, China’s Ten­cent par­tic­i­pated in a $900 mil­lion fund­ing round of Grail, an Amer­i­can com­pany work­ing on novel meth­ods for di­ag­nos­ing can­cer from blood sam­ples. Ja­pan’s Softbank led a $360 mil­lion in­vest­ment in Guardant Health, which is work­ing on sim­i­lar tech­nolo­gies in May 2017. And in July 2017, Ja­pan’s Kon­ica Mi­nolta an­nounced plans to buy Am­bry Ge­net­ics, another can­cer screen­ing com­pany, for $889 mil­lion. Other in­no­va­tions are rooted in novel part­ner­ships be­tween IVD com­pa­nies and other stake­hold­ers. A few di­ag­nos­tics com­pa­nies, for ex­am­ple, are part­ner­ing with in­sur­ers to dis­trib­ute DNA test­ing kits for pol­i­cy­hold­ers. By en­cour­ag­ing early de­tec­tion of dis­ease and dis­ease risks, part­ner­ships like th­ese could im­prove health out­comes for in­di­vid­u­als and thus re­duce claims costs for in­sur­ers – a win for ev­ery­one. Part­ner­ships be­tween IVD com­pa­nies and gov­ern­ments, NGOs, providers, and even tech­nol­ogy firms can pro­vide sim­i­lar op­por­tu­ni­ties.

Con­ver­gence of dig­i­tal tech­nol­ogy and di­ag­nos­tics

Dig­i­tal tech is bring­ing trans­for­ma­tion and dis­rup­tion to the med­i­cal di­ag­nos­tics arena. The com­bi­na­tion of dig­i­ti­za­tion, dig­i­tal imag­ing and pro­cess­ing and

ma­chine learn­ing is en­abling med­i­cal di­ag­nos­tics to be per­formed bet­ter, faster and cheaper, by­pass­ing man­power con­straints.

“One ex­am­ple is in dig­i­tal pathol­ogy.

Tra­di­tion­ally, highly trained pathol­o­gists spend sig­nif­i­cant time vis­ually in­spect­ing tis­sue sam­ples un­der the mi­cro­scope. This is a highly man­ual process, con­strained by the limited num­bers of trained pathol­o­gists. With the ad­vance­ment in dig­i­tal ca­pa­bil­i­ties, the first scan of the tis­sue sam­ples can be per­formed re­li­ably by a math­e­mat­i­cal al­go­rithm. This step can fil­ter out a siz­able pro­por­tion of sam­ples and dra­mat­i­cally re­duce the time spent by the pathol­o­gist. This is es­pe­cially im­por­tant in de­vel­op­ing coun­tries, where trained pathol­o­gists are in short sup­ply”, says Tan.

Alexis be­lieves that the fu­ture of di­ag­nos­tics is dig­i­tal. “As the gen­eral pop­u­la­tion be­comes more ac­cus­tomed to dig­i­tal de­vices and our lives be­come more dig­i­tal­ized, the con­ver­gence of dig­i­tal tech­nol­ogy with health di­ag­nos­tics prod­ucts has be­come an ex­pected nat­u­ral pro­gres­sion. Health­care data an­a­lyt­ics is also a grow­ing trend due to ris­ing in­ter­est from gov­ern­ments, health­care in­sti­tu­tions and pri­vate sec­tor or­gan­i­sa­tions. There is a con­sen­sus that with more health­care data recorded, the med­i­cal pro­fes­sion will be able to bet­ter de­ter­mine the as­so­ci­ated risks and pat­terns re­lated to var­i­ous diseases.”

How­ever, in re­cent years, this fo­cus has turned to con­sumers tak­ing charge of such data, em­pow­er­ing peo­ple to take a proac­tive ap­proach in manag­ing their own health. “For ex­am­ple, the Om­ron Con­nect mo­bile app be­haves like a per­sonal health aide, al­low­ing users to au­to­mat­i­cally record daily blood pres­sure and body com­po­si­tion read­ings. The app also sends re­minders and can con­ve­niently share data with doc­tors, re­duc­ing the need to visit clin­ics and hos­pi­tals. This “vir­tual con­sul­ta­tion” trend looks set to grow as well”, she adds.

Tech­nol­ogy has a key role to play in mak­ing ear­lier di­ag­no­sis a tan­gi­ble pos­si­bil­ity, help­ing to ease the bur­den by im­prov­ing pa­tient out­comes and re­duc­ing costs. In April 2018, FDA ap­proved an

AI- pow­ered di­ag­nos­tic de­vice (by a com­pany called IDx) for oph­thal­mol­ogy that does not need doc­tor’s help. “Con­ver­gence is hap­pen­ing at an ac­cel­er­ated pace with the rise of artificial in­tel­li­gence (AI) in the form of ma­chine learn­ing on the data that the di­ag­nos­tic de­vices are gen­er­at­ing. In the past, it was hu­man in­ter­pre­ta­tion of the data that then in­formed the clin­i­cal care. Now we have the abil­ity to en­hance and speed up the process. An ex­am­ple is our bio vi­tals an­a­lytic en­gine which takes in phys­i­o­log­i­cal

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