healthcare overview · in the healthcare industry, blockchain has a broad range of potential use...

Healthcare Overview

August 2018

1

Market Highlights

Source: Frost & Sullivan

The shift to greater

automation and digitization,

against the backdrop of a

declining pathologist

workforce, will drive demand

for tissue diagnostics

Tissue diagnostics

Minimally and non invasive

liquid biopsies offer an

alternative to tissue

diagnostics and are used for

disease profiling and

treatment monitoring

Liquid biopsies

In the healthcare industry,

blockchain has a broad

range of potential use cases

including claims adjudication

and billing management

Blockchain tech

Digitization will be

key to both capturing the

opportunities and negating

the challenges in the clinical

trial data management

market

Clinical trial solutions

Investment in medical

imaging equipment globally

is robust and expected to

increase in line with overall

spending on the health

industry in 2018

Medical imaging

Nuclear medicine has

developed rapidly; today, the

molecular imaging market is

dominated by SPECT, PET

and increasingly hybrid

modalities

Hybrid diagnostics

Smart hospitals derive

insights from networked

digital services to deliver

operational efficiency, clinical

excellence and patient

centricity

Smart hospitals

Growth in anti-aging

therapies is driven from the

supply side by technological

advances such as omics-

based and novel treatment

methodologies

Anti-aging therapies

2


Investment in medical imaging equipment globally is robust and expected to increase in line with overall spending

on the health industry in 2018; ultrasound (23%) is the largest segment in a $31b market which is dominated by

APAC (37%)

Segmentation

Medical imaging market, Global, 2018

23%

19%

18%

18%

10%

7%

5% Ultrasound

Interventional X-Ray

MR

CT

General X-Ray

Molecular

Mammographic X-Ray

Innovations

Opportunities for market participants

AI in Imaging

DigitalTomosynthesis

Market Trend #1

Medical imaging

3


Nuclear medicine has developed rapidly; today, the molecular imaging market is dominated by SPECT, PET and

increasingly hybrid modalities; PET/CT is expected to continue growing with market participants focusing on

marketing

Size and outlook Technology

New technologies for SPECT and PET

Market Trend #2

Hybrid diagnostics

PET/CT equipment market, US, 2017-23

233,7

247,7

316,4

0,0

100,0

200,0

300,0

400,0

2017 2018 2023

5.2% CAGR 2017-23

Reve

nu

e $

m

Cadmium Zinc

Telluride

for SPECT/CT

Silicon Photo

multiplier for

PET/CT

4


Smart hospitals derive insights from networked digital services to deliver operational efficiency, clinical excellence

and patient centricity; smart patient rooms feature controls, TVs, noise cancellation technology

and interactive tablets

Patient centricity Clinical excellence

Market Trend #3

Smart hospitals

Features of smart patient rooms

Smart Room Controls

Hospital-Grade Smart TV

Noise Cancellation Tech

Bedside Interactive Voice Tablet

Wash Station With Light Indicators

F

E

A

T

U

R

E

S

Advantages of digitalization for nurses

Scheduling

Rounding

Medication

5


Growth in anti-aging therapies is driven from the supply side by technological advances such as omics-based

and novel treatment methodologies; globally, the market was valued at $63b in 2017 and is expected to reach

$86b in 2022

Size and outlook Innovations

Market Trend #4

Anti-ageing therapies

Anti-ageing therapies market, Global, 2017-22

62,5

65,8

85,6

0,0

25,0

50,0

75,0

100,0

2017 2018 2022

6.5% CAGR 2017-22

Reve

nu

e $

b

Opportunities for market participants

Pharmacological

Targeting

Stem Cell &

Gene Therapy

6


The shift to greater automation and digitization, against the backdrop of a declining pathologist workforce, will

drive demand for tissue diagnostics; globally, the market was valued at $1,2b in 2017 and is expected to reach

$1.7b in 2022

Size and outlook Market participants

Market Trend #5

Anti-ageing therapies

Pre-analytical & advanced staining market,

Global, 2017Tissue diagnostics market, Global, 2017-22

1,2

1,3

1,7

0,0

0,5

1,0

1,5

2,0

2017 2018 2022

6.2% CAGR 2017-22

Re

ve

nu

e $

b

Leica19,5%

Dako11,9%

Roche 23,3%

Sakura Finetek7,0%

Thermo Fisher11.2%

Others27,1%

Source: Menarini, Frost & Sullivan

7

Minimally and non invasive liquid biopsies offer an alternative to tissue diagnostics and are used for disease

profiling and treatment monitoring; the principal markers include circulating tumor DNA and tumor cells and

extracellular vesicles

Technology Market participants

Market Trend #6

Liquid biopsies

Liquid biopsy substrates and biomarkers

ctDNA

CTCs

EVs

Key LB Biomarkers

Blood

Plasma

Urine

Key LB Substrates

Serum

Menarini Silicon Biosystems

Menarini Silicon

Biosystems offers

precision medicine

tools to enable insights

across biological

diseases

Company Technology

In April 2017, Menarini

acquired Janssen

Diagnostics’

CELLSEARCH®

Circulating Tumor Cell

System

8


In the healthcare industry, blockchain has a range of potential use cases including claims adjudication and

billing management; in the longer term, areas such as health records and data management will

also come into play

Applications Technology

Market Trend #7

Blockchain technologies

Long term opportunities, 2021-25

IoMT

(Quantified self, home care)

Universal Health Records and Identities

Genomics and User-generated Data Management

Blockchain AI and AR/VR Applications

High Medium Low

Features of blockchain

Decentralized

Secured

Peer to Peer

Trusted

Automated

9


Digitization will be key to both capturing the opportunities and negating the challenges in the clinical trial data

management market; globally, the market was valued at $2.9b in 2017 and is expected to reach $4.1b in 2020,

a 12.4% CAGR

Size and outlook Technology

Market Trend #8

Clinical trial solutions

Clinical trial solutions market, Global, 2017-20 Advantages of esource and EDC

2,9

3,2

4,1

0,0

1,0

2,0

3,0

4,0

5,0

2017 2018 2020

12.4% CAGR 2017-20

Reve

nu

e $

b

Key Areas

Cost-saving

Time-saving

Cleaner Data

10

...

• TBC

Medical Imaging

11Investment in medical imaging equipment globally is expected to increase in line with

overall spending on the health industry in 2018

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

2017 2018 Growth Rate

Total Healthcare Industry ($ Billion) 1,768.61 1,853.83 4.82%

1.195

371

29 65 108

1.246

390

31 72 115

0

500

1.000

1.500

Reve

nu

e (

$ B

illi

on

)

Healthcare ITIn-Vitro

Diagnostics

Medical

Technologies

Medical Imaging

Equipment

Pharma and

Biotech

2018

2017

Sector

Growth Rate

(2017–2018) 4.3% 5.2% 4.4% 10.0% 6.4%


12

Ultrasound is the largest segment in a $31b market which is dominated by APAC


Medical Imaging Equipment: % Revenue

by Segment, Global, 2018

Medical Imaging Equipment: % Revenueby

Region, Global, 2018

23%

19%

18%

18%

10%

7%5%

Ultrasound

Interventional X-Ray

MR

CT

General X-Ray

Molecular

Mammographic X-Ray

37%

23%

20%

9%

7%4%

Asia-Pacific

North America

Europe

Latin America

13Non-conventional business models such as Managed Equipment and Managed

Vendor Services are gaining ground in many countries


Key Predictions for 2018

1

Non-conventional business models such as enterprise imaging solutions, managed equipment services (MES) and managed vendor services

(MVS) and outsourcing of radiology services are picking up momentum in various countries, globally. Further, increasing age fleet of imaging

equipment will be the key attribute for increase in service revenues in regards to improvements in underlying wide-fleet imaging technologies.

The current market penetration of non-conventional business models stands at 2-3% and it is expected to have double digit growth rates in

2018.

2

In accordance with the key metrics of health systems and healthcare providers such as infrastructure, demand and price, the emergence and

continued preference towards the value segment of imaging systems will result in it growing by 1.5x the average growth rate of the imaging

industry in 2018. The ability to deliver in a workhorse environment, provide image quality on par with mid-end systems and embrace smaller

footprint/compact spaces regimes resulting in favorable market conditions.

3

Emerging countries in regions such as Latin America, ASEAN and Africa are expected to drive medical imaging equipment sales during

2018- 2020. Sustained increase in healthcare spending over the last 2 years, OEMs’ investments in setting up and expanding manufacturing

facilities (for example, Brazil, Tanzania), expanding distributor networks and development of local partnerships (for example, Colombia, Peru,

and Chile) and sustainable healthcare solutions business models in Africa and ASEAN will provide impetus for 8-10% market growth in the

next 2-3 years.

14For equipment vendors, opportunities exist in leveraging AI, developing portable

ultra sound solutions and using digital tomosynthesis


Artificial Intelligence in

Imaging

Portable and Handheld

Ultrasound

Digital

Tomosynthesis

• AI will move mainstream in the imaging

diagnostics segment, leveraging advanced/

deep learning capabilities to improve

screening outcomes.

• Operationalizing AI platforms across

medical imaging workflows would result in

10–15% productivity gains for radiologists

in the next 2-3 years.

• Digital Tomosynthesis continues to evolve

as a more effective diagnostic tool in breast

imaging and digital x-ray technologies, and

is expected to spur market growth in the

next 2-3 years.

• With x-ray technologies, Digital Chest

Tomosynthesis (DCT) is also proving to be

more effective at guiding clinical decision

making around detecting lung nodules.

• High growth opportunities in the ultrasound

imaging category with capabilities beyond

established clinical segments.

• Key areas of growth include: POC, primary

care, musculoskeletal, emergency

medicine, anesthesia, pain management,

and fusion imaging.

Images: Thinkstock, Frost & Sullivan

15

Arterys, Butterfly and Hologic (all US) are leading companies-to-watch in 2018

Source: Market participants, Frost & SullivanSelected players

Brief Summary:

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

and liver AI platforms in order to improve the

imaging accuracy of its cardiac MRI scans, provide

single click automated volumetric segmentation of

lung nodules and automated segmentation of liver

lesions. Arterys received FDA approval for its

cloud-based Cardio DL platform in January 2017.

Unique Value Proposition:

GE Healthcare’s Vios Works solution is powered

by Arterys. The company has also entered into a

partnership with Siemens Healthineers. In

November 2017, the company raised USD 30

million in Series B funding. Artery’s portfolio also

includes the FDA approved MICA platform, an AI

platform for medical imaging analytics, which

includes Arterys’ PHI Service for data security.

Brief Summary:

Butterfly Networks ushers in a new era of high-

performance, hand-held ultrasound systems. It

has developed the world's first Ultrasound-on-

a-Chip based imaging system (Butterfly iQ® for

iPhone) by combining almost 10,000 sensors,

covering across 13 clinical applications, with a

single transducer probe.

Unique Value Proposition:

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

diagnostic versatility, and assistive intelligence

makes the Butterfly iQ® the next ‘in’ stethoscope

in daily practices. It is expected to play a pivotal

role in the diagnosis of pneumonia and women’s

health during child birth.

Brief Summary:

As an OEM dedicated to women’s care, Hologic

continues to build on its product portfolio to address

the continuum of breast care through early

detection, diagnosis, surgical treatment planning,

and image-guided procedures.

In ECR’17, Hologic introduced its new dedicated

prone stereotactic biopsy system, ‘Affirm’ which

delivers the capability of performing both 2D and 3D

tomosynthesis-guided procedures on a single

platform.Unique Value Proposition: Transformation from

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

an established sales and distribution network for

women's health, as well as extensive relationships

with clinical labs and OB/GYN channels, will

accelerate Hologic’s customer penetration and

retention.

Artificial Intelligence Portable/Hand-held Ultrasound Digital Tomosynthesis

16

...

• TBC

Hybrid Diagnostics

17

Since the invention of the X-ray in 1895, nuclear medicine has developed rapidly


2000s to Present

Hybrid Tomographic imaging

Mid 1900s to 2000s

Radioisotopes, SPECT, and PET

Till mid-1900s

Origin of Nuclear Medicine

• Rontgen W.C first invented X-rays

(1895)

• Mysterious rays were named as

Radioactivity by M Curie (1897)

• Tracer Principle by Gy. Hevesy (1923)

• Invention of Cyclotron by E. O. Lawrence (1932)

• First therapeutic application of phosphorus-32, an

artificial radionuclide to treat leukemia (1936).

• Iodine 131 and cobalt 60 are discovered by John

Livingood & Glenn Seaborg (1938)

• Technetium-99m discovered by Glenn Seaborg

and Emilio Segre (1938)

• Discover of radioactive tracer carbon-14, that is

widely used in drug and medical research (1939)

• Saul Hertz gave first therapeutic dose of iodine 130

(1941)

• Thyroid cancer therapy by using iodine-131, an

atomic cocktail (1946)

• Distribution of radioisotopes started by Abbott

Laboratories (1948)

• First commercial radiopharmaceutical RISA –

iodine-131 human serum albumin sold by Abbott

Laboratories (1950)

• United States Food and Drug

Administration (FDA) approved first

radiopharmaceutical I-131 for use

in thyroid patients (1951)

• Robert F Schilling invented test for vitamin B-12,

which plays an important role in nuclear

hematology.(1953)

• First photo recorder system used for radionuclide

scanning by David Kuhl (1954)

• Hal Anger invented first gamma-camera or

“scintillation camera“ used for conducting dynamic

studies (1958)

• Rosalyn Yalow and Solomon Berson invented

radioimmunoassay technique to detect insulin

antibodies in human blood serum (1959)

• David Kuhl first introduced emission reconstruction

tomography, later became SPECT and PET. This

technique was further extended in radiology domain

to transmission X ray scanning called as CT (1962)

• US FDA approved world’s first Tc99m myocardial

agent (1991)

• US FDA approves [18F] Fludeoxyglucose (FDG) as

radiopharmaceutical (1997)

• Revolution in hybrid tomographic

imaging techniques (SPECT/CT,

PET/CT) and end of 2D planar

imaging

• Formation of National Institute for Biomedical

Imaging & Bioengineering in National Institutes of

health (2002)

• FDA approves clinical use of IDEC Pharmaceuticals’

Zevalin, a radio therapeutic agent (2003)

• Inauguration of PET center by Society of Nuclear

Medicine to practice advanced procedures in

nuclear medicine (2004)

• FDA approves Bexxar™ for use in lymphoma

(2004)

• World’s first hybrid PET/MRI created by SIEMENS

for human use (2008)

• Molecular imaging sees increasing fusion of images

with PET/CT scans to study both anatomical

information and functional in single image (2008)

• Quantitative 3D imaging by using hybrid devices

and beginning of targeted therapies (2010s)

18Today, the molecular imaging market is dominated by PET, SPECT and increasingly

hybrid modalities; PET-CT, SPECT-CT and PET-MR


Molecular Imaging Equipment

Positron Emission Tomography (PET)Single-Photon Emission

Computed Tomography (SPECT)

Stand-alone

PET

Hybrid

PET-CT

Hybrid

PET-MR

Stand-alone

SPECT

Hybrid

SPECT-CT

• PET imaging, like SPECT, produces three dimensional images of radioactive

materials introduced into the patient’s body. Unlike SPECT, which measures

gamma radiations, PET scans map the location of photons in the human body.

• PET radiopharmaceuticals differ from SPECT radiopharmaceuticals in that they

typically have a much shorter half life and decay producing positrons. These

positrons interact with and annihilate oppositely charged electrons resulting in

the release of two photons in opposite directions.

• PET detectors measure these photons to create images that are of higher

quality than those created by SPECT.

• PET scanners can be a standalone modality or combined with an x-ray

computed tomography (CT) in one single gantry to create a combined PET-CT

device. PET scanners can also be combined with a Magnetic Resonance

Imaging (MRI) modality in the same gantry to create a hybrid PET-MR device.

• Hybrid modalities are used to capture images of the human body

simultaneously and combine them in a single superposed image.

• SPECT imaging produces three dimensional images of the distribution of radioactive materials introduced into the patient’s body.

• The 3D images are computer generated from a large number of images taken from different angles.

• SPECT imagers come with gamma camera detectors that are used to detect gamma ray emissions from tracers injected into the patients.

• SPECT scanners can be a standalone modality or combined with an x-ray computed tomography (CT) in one single gantry to create a combined SPECT-CT device.

19

The uptake of multimodality imaging is helping to explore novel therapeutic areas


High clinical benefits

and adoption of multi-

modality nuclear

imaging providing novel

integrated solutions

• Based on the clinical results obtained from the lesser specific or other frontline imaging

modalities, most of the patients undergo PET and SPECT imaging techniques as a subsequent

clinical examination.

• Mostly for patients, PET and SPECT images act as a compliment to the existing image priors.

Over a period of time, it is demonstrated that fusion of image datasets or side-by-side

comparison of data from multi-modality imaging often add value to clinical interpretations.

• Given the increased value and demand for multimodality imaging, OEM manufacturers are

highly targeting the multi-modality imaging solutions market that include PET and SPECT

technologies

• Growth of the multi-modality imaging is expected to grow with more pace as the market

continuous to shift toward hybrid imaging technology equipment and the growth is

comparatively faster when compared to single modality PET and SPECT imaging solutions.

• By integrating instrumentation in multi-modality imaging, the medical imaging market has

opened doors for parallel development in synthesizing novel radiotracers or imaging agents

that can be viewed by these multi-modality techniques.

• PET/MRI is evolving as a most promising next generation multi-modality imaging tool because

of MRI’s better contrast among soft tissues and high functional capabilities.

20Improved software and technology is however driving up costs making the

affordability of hybrid modalities a major barrier to adoption


• While for profit and not for profit hospital revenues have improved over the last few years, high cost of hybrid molecular imaging modalities make them prohibitively expensive for small and mid-sized hospitals.

• Rural hospitals which account for 33% of all hospitals in the US currently face severe financial challenges with about 283 at risk of closure across the country.

• This prevents these hospitals from investing in high-end technologies like hybrid molecular imaging modalities.

• Molecular imaging modalities currently face competition from premium CT and MRI modalities. This can be attributed to improvements in CT and MRI technology over the last few years coupled with greater emphasis on modular design.

• Lower cost of CT and MRI modalities when compared to molecular imaging modalities also make them an attractive option for hospitals and imaging centers operating on tight budgets.

• Hospitals that use molecular imaging modalities need to be within a certain distance from a radio pharmacy in order to receive and use radiopharmaceuticals with short half lives.

• Alternatively, hospitals need to invest in generators that can used to extract radiopharmaceuticals from cold kits.

• Both options require hospitals to invest significantly in supporting infrastructure

Hospitals’ financial

status

Rural hospitals’

challenges

Inter modality competition

Complexity of molecularimaging

21PET/CT is expected to continue growing strongly with many market participants

placing greater focus on ensuring effective marketing


PET/CT Equipment: Revenue Forecast,

US, 2013–2023 CAGR: 5.3%PET/CT Equipment: % of Sales, US, 2016

0

50

100

150

200

250

300

350

2013 2016 2017 2018 2023

Revenue 186,9 220,5 233,7 247,7 316,4

Reve

nu

e (

$ M

illi

on

)

Year

42%

40%

10%

7% 1%Siemens Healthineers

GE Healthcare

Toshiba Medical Systems

Philips Healthcare

NeuSoft

Leader Key FDA Approved Products

Siemens

Biograph mCT Flow PET/CT; Biograph mCT 20

Excel PET/CT; Biograph mCT PET/CT;

Biograph Horizon PET/CT

22

For SPECT/CT, radioisotope supply issues will only start to be resolved this year


SPECT/CT Equipment: Revenue Forecast,

US, 2013–2023 CAGR: 1.1%SPECT/CT Equipment: % of Sales, US, 2016


SiemensSymbia Intevo Excel SPECT/CT; Symbia T

Series SPECT/CT; Symbia Intevo SPECT/CT

0

20

40

60

80

100

120

2013 2016 2017 2018 2023

Revenue 103,9 70 65,8 64,5 75,6

Reve

nu

e (

$ M

illi

on

)

Year

48%

46%

6%

Siemens Healthineers

GE Healthcare

Philips Healthcare

23PET/MR revenue growth has been driven by inflation with the average price of a

system moving from $3.6m to $5.4m in recent years


PET/MR Equipment: Revenue Forecast,

US, 2013–2023 CAGR: 1.7%PET/MR Equipment: % of Sales, US, 2016


GE Signa PET/MR

0

10

20

30

40

50

60

70

2013 2016 2017 2018 2023

Revenue 51,6 44 44 58 49,5

Reve

nu

e (

$ M

illi

on

)

Year

70%

30%GE Healthcare

Siemens Healthineers

24Aside from the established players (Siemens, GE), new players are entering the

market; NeuSoft launched a hybrid solution in 2016

Source: NeuSoft; Frost & Sullivan

Key Features of NeuSight (China) PET/CT

1

3

2

4

Patented

Patient

Couch

Integrated

Modality

Cardiology

Applications

Large Size

Gantry

• NeuSight gantry size is 72 cm, allowing for patient comfort, irrespective of patient size.

• This is expected to reduce patient anxiety, which is a critical requirement in reducing scanning times.

• This, in turn, can contribute to increased patient volumes.

1

• NeuSight can be used for the detection of myocardial ischemia and coronary heart disease.

• This functionality of the NeuSight enables it to compete more aggressively with other PET/CT systems, as more number of cardiac PET scans are being performed.

2

• The NeuSight’s patented double lifter patient couch eliminates deflection between CT and PET during imaging.

• This facilitates precise fusion of PET-CT images, resulting in high quality images with superior quantitation accuracy.

3

• The NeuSight PET/CT comes with integrated workstation, data management, and analytics systems.

• This is necessary to enable clinicians to share and analyze data in order to improve workflow efficiencies and reduce scan times and dosages.

4

25Moving forward, technology trends will include the use of photomultipliers for PET/CT

and cadmium zinc telluride for SPECT/CT


Silicon

Photomultiplier

for PET/CT

• The photo-detector in molecular imaging modalities is traditionally a photomultiplier tube (PMT). Over the last few years, a solid-state (silicon) alternative to the old vacuum-based PMT has been introduced. This sensor is called Silicon Photomultiplier (SiPM).

• The SiPM detector is compact, requires low operation voltage, and is insensitive to magnetic fields. The SiPM enables ease of segmentation for obtaining high spatial resolution, a critical requirement in obtaining high quality images at lower cost.

• Digital SiPM has recently emerged as a technology with promising potential in molecular imaging. The digital SiPM addresses several issues of the analog SiPM, which include lower noise susceptibility and better power consumption.

Cadmium Zinc

Telluride

for SPECT/CT

• The next few years will see the adoption of Cadmium Zinc Telluride (CZT)-based detectors over conventional sodium iodide cameras.

• CZT is not organ specific and can be used for whole body imaging as well as detection of small lesions. This technology can also be used for simultaneous viewing of anatomical structures.

• GE offers the Discovery NM/CT 670 CZT SPECT/CT, with an option of upgrading for Discovery NM/CT 670 PRO users. Molecular Dynamics is also in the process of launching the Valiance X12 CZT SPECT/CT.

26

...

• TBC

Medical Imaging

ITALY

27Italy has a sizeable and well utilized installed base of CT and MR equipment which is

worth around $3.6b including amortization


Total Addressable Market: Hospital and Diagnostic

Imaging Centers, Italy, 2016

542

400–

500

621

Public

Hospitals

Private

Hospitals

Diagnosti

c Centers

Potential Medical Imaging Equipment Customers in Italy

High-end

customers

Low-end

customers

Procedure

Volume,

Italy (2015)

CT: 7.0-7.5 million,

slightly increasing

MR: 6.0-6.5 million,

slightly increasing

Installed

Base (2015)

CT: 2023 Units,

slightly increasing

MR: 1,674 Units,

slightly increasing

Installed Base

Worth (2015)

CT: $1.72 billion,

slightly increasing

MR: $1.87 billion,

slightly increasing

28

With an ageing fleet, the need for equipment renewal is however becoming urgent

Source: http://www.salute.gov.it/imgs/C_17_pubblicazioni_2554_allegato.pdf; Frost & Sullivan

Tailwind: The need for equipment renewal is becoming urgent

especially among CT and MRI scanners. Regulatory decisions

such as dose reduction mandates by the European Commission

or other entities are also contributing factors.

Headwind: The growing gap between the actual and

recommended age profiles means Italian healthcare policymakers

may take radical decisions that limit the utilization of CT and MRI

while favoring low-cost modalities such as X-ray or Ultrasound.

MES and MVS Market: CT and MRI Scanner Installed Base Age Profile, Italy 2016

Less than 5years

Recommended % Actual %

60 36

Gap %

(24)

Age 5–10 years 30 43 13

Above 10 years 10 21 (11)

• The actuals of 21% and 28% of ageing

equipment (>10 years) in CT & MRI, can

result in new equipment purchases in the

next 3 to 5 years. This could provide a 50%

opportunity for MES contracts with hospitals

to provide state-of-the-art CT and MRI

equipment.

• Further, installed base percent in the

equipment age (5–10) years are significantly

high in CT & MRI. As these tend to move

towards the ‘above 10 years age group’, it

can lead to a strong opportunity for MES and

MVS services in Italy, as hospitals are likely

to refrain from capital investments.

Less than5 years

Recommended % Actual %

60 35

Gap %

(25)

Age 5–10 years 30 37 7

Above 10 years 10 28 (18)

CT

MRI

http://www.salute.gov.it/imgs/C_17_pubblicazioni_2554_allegato.pdf

29In Italy, as elsewhere, Managed Equipment and Multivendor Service models are

proving a genuine alternative to traditional procurement


• The traditional procurement model for capital medical imaging equipment is characterized by a capital purchase topped-up with a multi-

year (typically 5) maintenance contract with the OEM. However, a number of non-conventional business models fall outside of

conventional models; the most popular and well defined models are:

Managed Equipment Services (MES): Main Focus - Technology Management

• This is a bundled solution that includes the procurement and purchase of new equipment or fleets, basic maintenance and support,

technology management, planning and potentially a number of more advanced value-adding services. The bundle is usually financed by

the customer through operational expenditure and typically extends, at a minimum, through the useful life of the equipment (7+ years).

Apart from capital and technology management plans, MES may also provide training, education, integrator services and frequent

updates of the latest available technology to ensure state-of-the-art performance. This helps healthcare providers to strategically plan

their long-term finances and benefit from future improvements and innovations

Multivendor Services (MVS): Main Focus – Cost Containment

• This is an offering that combines basic and more advanced services (e.g., repair and maintenance, engineering, equipment and asset

management) in addition to replacement planning (small components in imaging systems) for single or multiple modalities in an imaging

fleet. MVS do not include purchase of new equipment as in MES and tend to be awarded separately from the purchase. The MVS

provider can be one of the equipment OEM’s or a third-party service company, and acts as a single source for service. These service

contracts are usually short-term and extend for a maximum of 3 to 5 years. This helps cost-contain the management of equipment

purchased from various vendors and simplifies the provider’s management of multiple vendor relationships.

30The MES and MVS market is expected to grow from $27m in 2016 to $70m in 2021

which translates to a CAGR of 13.6% in revenue terms


The market is poised to grow due to the pent-up need for replacement of obsolete systems and signing of framework agreements in

the service line. Further, hospitals with PPP and PFI models are expected to play a positive role, adding the flavors of MES-/MVS-

based agreement or large-scale framework agreement contracts in the next 3 to 4 years.

0,0

4,0

8,0

12,0

16,0

20,0

0,010,020,030,040,050,060,070,080,0

2014 2015 2016 2017 2018 2019 2020 2021

Revenue 30,9 33,8 37,0 43,0 49,0 56,5 64,0 70,0

Growth Rate - 9,4 9,5 16,2 14,0 15,3 13,3 9,4

Gro

wth

Rate

(%

)

Re

ve

nu

e (

$ M

illi

on

)

Year

MES and MVS Market: Revenue Forecast, Italy, 2014–2021 CAGR, 2016–2021 = 13.6%

MES only after 2016; includes CT and MR only

31

Local player TBS Group, based in Trieste, is the market leader with a 26% share


Includes CT and MR only; Others include Esaote, Affedia and Medipass;

Pantheon acquired

MES and MVS Market: Percent Revenue by Contract, Italy,

2016 Total Revenue: $37.0 M

Large-Scale Frameworks

41,4%

Small-Scale Frameworks

58,6%

Contracts by TypeNumber of Active

Contracts

Large-scale Framework Agreement MVS 4

Small-scale Framework Agreement MVS More than 15

MES and MVS Market: Percent Revenue, Italy, 2016

Total Revenue: $37.0 M

TBS Group26,2%

Siemens SpA6,5%

Pantheon Group19,2%

GE Medical Systems

SpA15,4%

Philips Medical Systems SpA…

*Others20.3%

Top 3 Competitors

Annual MVS

Revenue ($ M)

TBS Group 9.7

Pantheon Group 7.1

GE Medical Systems 5.7

32

...

• TBC

Smart Hospitals

33Changes in healthcare delivery models and the reimbursement landscape are putting

hospitals under pressure to either adapt or close


CHANGE

Next level of supply chain savings

• Implement data standards

• Change contracting process

• End-to-end supply chain costs

• Expand scope of products in distribution

Moving beyond the acute care setting

• Enable home care setting

• New front-line care models

• Leverage non-acute data

Supporting outcomes

• Link products and outcomes

• Data for actionable insights

• Share risk

• Standardization

Restructuring for consolidation

• Transparency on product-service costs

• Strip away supply chain costs

• New capabilities to enhance care outcomes

PRESSURE

HOSPITAL

CHANGE CHANGE

CHANGE

34The adoption of digital solutions is helpful but just because a hospital is

“connected” this does not necessarily mean that it is “smart”


Ambiguity

Between

Smart

& Digital

Hospitals

Some fully digitalized hospitals do not

call themselves ‘Smart Hospitals’,

while some hospitals that are not fully

electronic call themselves ‘Smart

Hospitals’

The terms ‘Smart Hospital’ and ‘Digital

Hospital’ are often used interchangeably

for hospitals that invest on digital

technology to improve patient care and

physician and patient experience.

Healthcare Information and Management Systems

Society (HIMSS) defines smart hospital as part of

the SMART Healthcare ecosystem that integrates

the home, hospital, patient, information exchange,

and existing data into a larger system.

Transition Toward Smart Hospitals

Incre

asin

g c

om

ple

xity

Smart HospitalsTraditional Hospitals

Exploratory

Implementations

Intermediate Stage

Smart HospitalsDigitization opportunities and benefits

they bring are implemented with some

process changes, but in silos, without

complete integration with other

systems for realizing full potential

Some processes are aligned and management

systems implemented along with digitization to

achieve some benefits of smart hospitals

Complete alignment of clinical

processes, governing

management systems and

even infrastructure/facilities

along with digitization to

become true ‘smart’ hospitals

Not all digital hospitals are smart, but all smart hospitals must have digital elements!

Smart Hospitals Market: Stages in Transition to Smart Hospitals, Global, 2016

35

Truly “smart” hospitals derive insights from the networked digital services …

Source: Frost & SullivanImage: Flaticon (Freepik)

• Digital hospitals are ‘connected’, but just because they are networked, does not make them ‘smart’!

• Truly smart hospitals derive insight and value from the networked services in a digital hospital

Smart Hospital:

Areas for Development

Operational Efficiency1

Clinical Excellence2

Patient Centricity3

Ad

va

nta

ge

s

Reduce operational

costs, improve margins

Help patients recover

faster

Reduce staff burden,

make jobs easier

Improve patient

satisfaction and

experience

36

… to deliver operational efficiency, clinical excellence and patient centricity

Source: Frost & SullivanImage: Flaticon (Freepik)

Facilities

Building Automation Systems

Network Infrastructure

Asset Maintenance and Management

Mobile Asset Tracking

Logistics

Inventory Control

Other Logistics

People Flow

Personnel

Nurses

Patient Rooms

OPERATIONAL

EFFICIENCY

CLINICAL

EXCELLENCE

PATIENT

CENTRICITY

Doctors

Departments

Patient Outcomes

Emergency

Surgery

Radiology

Hospital-Wide

Patient Monitoring

Referrals

Patient Engagement

Hospital Services

Technology Initiatives

Hospital Design

37


Use case 1: Operational Efficiency

Building Automation Systems

Heating, Ventilation and Air

Conditioning (HVAC)

Lighting

Power Distribution

Plumbing

Fire Alarms

Security and Access Control

Hot Water Boilers

Medical Gas Systems

Surveillance

Sin

gle

Fro

nt-

End U

ser

Inte

rface N

ecessary

Graphic dashboards and user interfaces:• Environmental conditions• Safety factors• Equipment maintenance• Energy usage• Regulatory compliance• Occupancy

Customized dashboards - for non-

traditional BAS users like nurses

and patients

View and control via any connected

computer, tablet or smartphone—

for staff, patient use, as well as for

administrators in-field for routine

maintenance

Combine with energy management

software for analytics, integration of

• Insights at unit-basis, individual

equipment level to understand

performance and issues

• Staff and patient feedback

Ability to view and maintain control

remotely over geographically

distant sites of health systems:

hospitals, medical practices,

clinics, free-standing emergency

departments and imaging centers.

Automatic fault detection and

diagnosis for faster resolution of

issues, adopted over a continuing

basis, especially for older buildings

where performance tends to

degrade over time

Building

Automation

Systems

BAS X

BAS Y

Interoperability Crucial

Interoperability

Crucial

38


Use case 2: Clinical Excellence

Personnel Nurses

Scheduling

Alarm Management

NURSE Rounding

Patient Bedside Support

Medication Management

Tools like NurseGrid enable nurses to mange their

shifts via their own mobile devices, allowing for real-

time shift management, flexible schedule changes and

instant notifications for nurses. Such tools help improve

efficiency while addressing staff shortage issues.

Digitizing patient rounding with customized

surveys can help with data collection efforts,

identifying issues, enabling real-time alerts, and

ensuring accountability while providing patient

satisfaction with EMR integration.

Mobile medication workstations, synced with

automated dispensing cabinets and patient EHR with

barcode-based patient identification, can save

nurses’ time, reduce medication errors,

and improve efficiency.

Software that syncs with several patient-monitoring devices

reduces alarm fatigue and alerts caregivers regardless of

their location in the hospital, allowing them to communicate

with one another, helping improve patient outcomes, while

reducing the stress on the staff.

Nursing staff empowered to use digital tools such as bedside

interfaces to reduce admin paperwork, access accurate records

and get decision and workflow support based on captured patient

data. These tools can make managing patient care plans,

monitoring their condition, and scheduling patient care easier,

improving nurses’ work experience.

SMART

HOSPITAL

Beds with integrated

scales and semi-

autonomous power

transport capabilities to

reduce burden on staff

Smart Beds

Image: Flaticon (Medical Elements, Madebyoliver)

39


Use case 3: Patient Centricity

Smart Patient Rooms

Image: Thinkstock

The Smart Patient Room

Smart Room Controls

Hospital-Grade Smart TV


Bedside Interactive Voice Tech/Tablet

Entrance Hand-Wash Station With Light Indicators

F

E

A

T

U

R

E

S

U

S

E

C

A

S

E

S

Smart TV/Tablet

• Patient education

• Browse Internet

• Ability to order meals

• Video conferencing with family, friends,

and even remote specialists

Smart TV/Voice Tech/Tablet

• Entertainment

• Announce visiting care provider’s name and

credentials

• Information on physician schedules, visiting hours

• Clinical information on daily treatment schedule, vitals,

test results

• Reminders on patient schedule and appointment

information

• Calming music and sounds

Voice Tech/Tablet• Room environment controls – light

and thermostat


Improve patient comfort, allow for better sleep

and healing

Entrance Hand Wash

LED light indicators on hand wash (red, orange,

green) indicate effectiveness; visible to patient

ensuring protocol compliance for nurses and

doctors, and satisfaction for patients

40

...

• TBC

Anti-Aging Therapies

41


The anti-aging therapies market includes conventional therapies, dietary

supplements and aesthetic procedures, devices & products

• Conventional Therapies: This includes the conventional treatment of age-related ailments such as Alzheimer's and Parkinson's disease,

arthritis (osteoarthritis), osteoporosis, age-related ocular diseases (such as cataract, glaucoma, and Age-related Macular Degeneration, AMD),

and Benign prostatic hyperplasia (BPH)

• Dietary Supplements: This includes Anti-Aging-focused supplements that are available directly to consumers (DTC). The segment covers

vitamins and minerals, herbs and botanicals, sports nutrition, and specialty supplements

• Aesthetic Procedures, Devices, and Products: The includes minimally/non-invasive cosmetic procedures, including botulinum toxin,

hyaluronic acid, Laser, light-emitting diode (LED), and photorejuvenation devices

• The analysis excludes highly commoditized and/or segregated segments such as skin cosmetics (anti-wrinkle products etc.) as well as market

segments not directly within the purview of anti-aging methodologies (such as invasive plastic surgery, acne therapy, liposuction, and hair

restoration). We have also excluded the fitness/spa treatment and services from our analysis

Conventional TherapiesAesthetic Procedures, Devices, and Products

Total Anti-Aging Therapies and Services Market

Dietary Supplements

Anti-Aging Therapies and Services Market: Market Segmentation, Global

42


Growth is driven from the supply side by technological advances such as omics-

based and other new novel treatment methodologies

Drivers 1-2 Years 3-4 Years 5th Year

Rapidly aging target population globally and related increase

in global healthcare expenditureH H H

Technology advances such as in ‘omics’-based technologies,

as well as novel treatment methodologiesH H H

Aesthetics segment driven by psychological value that is not

influenced by macroeconomic factorsH H H

Anti-Aging Therapies and Services Market: Market Drivers and Restraints, Global, 2016-2022

Restraints 1-2 Years 3-4 Years 5th Year

Clinical trials to identify novel medicine taking a long time to

show relevant resultsH H H

Lack of investor education—VCs and other investors unclear

on where and how to invest and the kind of returns to expectH H H

Limited scientific guidance on dosage, as well as low

awareness on scientific benefits of dietary supplementsH H H

Impact Ratings: H = High, M = Medium, L = Low

43On the demand side, the global population is continuing to age; 21.2% of Italians

were 65 years old or more according to a 2015 census

Population Statistics, Global, 2015, 2030, and 2050

Year Total Global Population, m Aged Population (65+), m % of Total Population Growth Rate (%)

2015 7,253.3 617.1 8.5 -

2030 8,315.8 998.7 12.0 61.8

2050 9,376.4 1,565.8 16.7 56.8

Selected countries

Number of

centenarians

in Japan (2017)67,82

4

Number of American baby

boomers turning 65 every day:

10,000

Average annual increase of older

people (65+), 2015-50 globally:

27,000,000

Percentage of Aged (65+) Population, Selected, 2015

26.6%Japan

21.5%

Germany

21.2%

Italy

20.5%Greece

20.0%Sweden

14.9%United States

Selected countries Source: US Census Bureau, World Bank,

Frost & Sullivan

44The global anti-aging therapies market was valued at $59.7b in 2016 and is expected to

reach $85.6b in 2022, a revenue CAGR of 6.2%

Anti-Aging Therapies and Services Market: Revenue Forecast by Segment, Global, 2016–2022


0,010,020,030,040,050,060,070,080,090,0

2016 2017 2018 2019 2020 2021 2022

Aesthetic Procedures,Devices, and Products

5,34 5,79 6,27 6,81 7,41 8,07 8,79

Conventional Therapy 26,14 26,94 28,01 29,50 31,41 34,65 38,03

Dietary Supplements 28,22 29,81 31,48 33,22 35,00 36,84 38,73

Reve

nu

e (

$ B

illi

on

)

Year

45Atrium Innovations (Canada), Nature’s Bounty (US) and BASF (Germany) are key

players in the largest, dietary supplements segment


Atrium Innovations

• Atrium Innovations is a leading Canadian

nutritional products company, with brands

such as Garden of Life and Pure

Encapsulations.

• In December 2017, Atrium was acquired

by Nestle from Permira Funds for $2.3

billion, to expand its presence in

consumer healthcare to help offset slow

growth in packaged foods.

• The deal improves Nestle’s presence in

probiotics, plant-based protein nutrition,

meal replacements, and multi-vitamin

segments.

The Nature’s Bounty Co.

• The company is a leading manufacturer

and marketer of dietary supplement

brands such as The Nature’s Bounty,

Sundown Naturals, and Osteo Bi-Flex.

• In July 2017, the company’s controlling

stake was sold to KKR, an investment

firm, by owner The Carlyle Group, who

had bought the firm and taken it private in

2010.

• While expanding KKR’s presence in the

health and wellness space, the deal will

likely aim to expand The Nature’s

Bounty’s franchise globally.

BASF

• In March 2018, BASF become a member

of the Personalized Nutrition and Health

Consortium, which researches on the

capabilities needed to enable

personalized nutrition.

• BASF will contribute to research via its

health ingredients brand, Newtrition,

focused on optimized micronutrient intake

for health and disease prevention for all

stages of life.

• BASF aims to use this opportunity to

collaborate with market partners and

introduce personalized nutrition solutions.

46Moving forwards, there are significant growth opportunities for market participants in

areas such as regenerative stem cell therapy


Digital Patient

Engagement

• Digital enablers such as

mobile, cloud-based

solutions, and AI are now

pervasive.

• Digital therapeutics to

deliver clinical effect is

expected be prominent,

along with digital pills.

• Telemedicine will emerge

as a key support

mechanism for the elderly.

Clinically Validated

Supplements

• The dietary supplements

space is moving away

from marketing-driven

tactics, as consumers are

demanding clinically

validated results.

• Clinical validation,

personalized genome-

based diets, and fasting-

mimetic diets are likely to

grow.

Comfort and Efficacy of

Aesthetic Solutions

• Customers using

aesthetics solutions

demand long-lasting

results that are easy to

administer and cause

minimum discomfort.

• While the female

population is still the

leading user, the male

population is likely to

emerge as a key market

segment.

Pharmacological

Targeting

• Aging is the result of

multiple genes, processes,

and pathways that are

being targeted to manage

the aging process.

• Some action areas are

telomeres, rapalogs,

senescent cells,

mitochondria-based

therapies, and

antioxidants.

Stem Cell and

Gene Therapy

• Regenerative medicine

driven by stem cell and

gene therapy

applications, along with

tissue engineering,

offers numerous

opportunities in areas

such as oncology and

arthritis.

• Regulatory management

will remain crucial.

47Telomeres, rapalogs, senescent cells, mitochondria-based therapies and antioxidants

are approaches in pharmacological targeting

Source: Market participants, Frost & Sullivan

Approach Company Description

Telomeres

aims to find entities that can induce telomerase expression and reduce telomere shortening

is focused on telomerase-based therapy to treat Alzheimer's disease

Rapalogs

is focused on discovering and developing drugs to selectively modulate mTORC1 activity

is focused on the development of novel rapalogs that deliver greater mTORC1 selectivity

Senescent Cell

Targeting

is developing a patent-pending, DNA-targeted method to clear senescent cells

is focused on the development of therapies that selectively eliminate senescent cells to restore tissue functionally

has identified a specific subpopulation of immune cells—Senescent-associated Macrophages (SAMs)—which may

contribute to aging and related diseases

Mitochondria-based

Therapies

focuses on the mitochondrial genome to discover clinically relevant peptides that can be developed into treatments

aims to preserve and restore mitochondrial health in degenerative diseases

Antioxidantsuses a patented chemistry scaffold Kromex to create a new chemical entities library with capabilities to modulate a wide

spectrum of oxidative stress-associated diseases

Selected approaches and companies

48

...

• TBC

Tissue Diagnostics

49Tissue diagnostics deploy pre-analytical and/or advanced staining to assess samples

obtained via biopsy for the presence of cancer


• Tissue diagnostics is defined as a methodology which is used to assess tissue samples obtained during a medical procedure for patient care.

Traditionally, tissue specimens obtained via biopsy are stained with dyes or markers which are observed under the microscope to check for

abnormalities in cell structure. Although there are other novel technologies such as digital pathology to assess tissue samples, tissue diagnostic

techniques are still considered as gold standards in cancer diagnosis.

• The key techniques used to diagnose tissues are Pre-analytical (here, tissues are dyed with primary stains (H&E) , some cancer lesions require

advanced staining where more precise staining methods such as in-situ hybridization (ISH), immunohistochemistry (IHC), and special stains are

used; the entire process management is carried out with laboratory management software) and anatomical pathology laboratory information

systems (APLIS).

Pre-analytical staining Advanced Staining

Anatomical Pathology Laboratory Information Systems (APLIS)

Tissue Sample

Grossing

Processing

Embedding

Sectioning

Primary Staining (H&E)

In-Situ Hybridization (ISH) Immunohistochemistry (IHC)

Biopsy specimen barcoded for tracking

Specimen sealed in a plastic cassette

Specimen dehydrated in alcohol and replaced with

paraffin wax

Specimen placed in moulds for slicing

Frozen specimen cut using microtome

Specimens stained with Hematoxylin and eosin

(H&E) for cell observation

Expression of specific cancerous

genes in the specimen is targeted

using DNA or RNA probes (which

are radio, fluorescent, or antigen

labeled) in an in-situ environment.

Expression of specific cancerous

proteins in the specimen is targeted

using antibodies (which are

conjugated with enzyme or

fluorophore).

ImagingAnalogue or digital imaging techniques can be

used for viewing the specimens.

50Reimbursement cuts have impeded growth but partnerships with instrument

distributors have rendered the supply chain more efficient


Reimbursement cuts and

customer consolidation in the US

and Western Europe have

impeded growth in certain parts

of this industry and are likely to

remain in the next 2–3 years.

Investments to innovate

end-to-end integrated

workflow solutions which

are a one-stop-shop will aid

growth strategy and product

differentiation.

Collaboration with APLIS

vendors and partnerships in

emerging markets with instrument

distributors would provide

opportunity to have end-to-end

tissue diagnostics portfolio and

efficient supply chain

respectively.

Shift to automation and

digitization in the backdrop of

declining pathologist workforce

will drive growth of the tissue

diagnostics market.

Emerging alternative to tissue

diagnostics are liquid biopsy

in cancer therapy and NGS

molecular technology which

will pose a threat to the

market and would hamper its

growth in the long term.

Tissue-based companion

diagnostics has generated

significant interest among

vendors; collaborations will

be one of the key growth

opportunity for this industry.

51The shift to greater automation and digitization, set against the backdrop of a

declining pathologist workforce, will drive robust growth


ImplicationTrend

Decline of workforce pathologists

Automation • Automation is an important trend for advanced stains that place substantial demands on

clinical labs in terms of personnel training and hands-on time.

• There is a declining trend of histopathologists due to factors such as retirement and low

supply of young pathologists.

• Most of the large tissue diagnostics firm have automated staining systems such as Leica

Biosystems (BOND series), Dako (Omnis), Sakura (Tissue-Tek Genie), Ventana

(BenchMark ULTRA), etc.

• There has been a gradual decline in the pathology work force.

• This is essentially due to population growth, increase in disease incidence, aging

population.

• The pathologist shortage will negatively impact both patient access to laboratory services

and health care providers’ abilities to deliver more effective health care to their patient

populations.

• In the US alone, there will be a deficit of ~ 5700 FTE histopathologists by 2030 from an

estimated 10909 in 2017 due to factors such as retirement and low supply of young

pathologists which will trigger the need for automation in the tissue diagnostics market.

52The global tissue diagnostics market was valued at $1.2b in 2016 and is expected to

reach $1.7b in 2022, a revenue CAGR of 6.2%


Tissue Diagnostics Market: Forecast by Segment, Western Europe, 2016–2022

CAGR Pre-analytical, 2017–2022 = 3.9 %

CAGR Advance Stains, 2017–2022 = 6.6%

CAGR APLIS, 2017–2022 = 8.8%

Year

0,0

200,0

400,0

600,0

800,0

1.000,0

1.200,0

1.400,0

2016 2017 2018 2019 2020 2021 2022

APLIS 88,9 96,2 104,5 113,5 123,5 134,5 146,6

Pre-analytical Market 270,4 278,1 288,5 299,6 311,4 323,9 337,1

Advance Staining Market 796,2 850,5 905,7 965,1 1.029,1 1.098,0 1.172,1

Re

ve

nu

e (

$ M

illi

on

)

53In Western Europe, Leica Biosystems (Germany) is the leader with a ~20% share

of the pre-analytical and advanced staining segments


Pre-analytical and Advanced Staining Market Share,

Western Europe, 2017APLIS Market Share, Western Europe, 2017

Leica19,5%

Dako11,9%

Roche 23,3%

Sakura Finetek7,0%

Thermo Fisher11.2%

Others27,1%

Tier 1 57,0%

Tier 2 43,0%

Company 2017 Revenue ($ Million)

Leica Biosystems 220.2

Dako (Agilent) 134.5

Roche 263.3

Sakura Finetek 78.6

Thermo Fisher 126.2

Others 305.8

Total 1,128.5

Company 2017 Revenue ($ Million)

Tier 1 CompuGroup Medical AG, MIPS,

NoemaLife and Technidata54.4

Tier 2 Cerner UK, Intersystems,

Diamic, Tieto, Finalist Noord, Sunquest and

Others

41.1

Total 95.5

54Tissue-based companion diagnostics (CDx) have generated significant interest among

vendors looking to provide a suite of solutions


Rise in Companion Diagnostic (CDx) Partnerships Tissue Diagnostics Market: Regulatory Governance

and Ease of Approval of CDx,

Western Europe, 2017Increasing concern over early disease detection, screening,

and better diagnosis is a major factor stimulating the segment

growth. Companies such as Dako, Leica Biosystems, and

Roche have demonstrated successful CDx partnerships that

provide a complete workflow of solutions for tissue-based

protocol. For example, in 2017, Roche's VENTANA PD-L1

(SP263) assay for detection of Programmed Death Ligand 1

(PD-L1) in tumor tissues received the CE Mark for identifying

non-small cell lung cancer (NSCLC) patients that can be

considered for KEYTRUDA (pembrolizumab) immunotherapy.

In 2017, Leica Biosystems along with Bayer was working

on a CDx test for cancer patients.

France is the most attractive market for CDx in Western

Europe with a national reimbursement system procedure that

has been devised to assesses CDx tests based on a

risk/benefit ratio. Furthermore, protocols for fast-track fee

reimbursement are in place. Other key attractive markets

would be Germany and the UK.

UK

France

Spain

Italy

GermanyBelgium

Netherlands

Well-established

Moderate

Reg

ula

tory

Go

vern

an

ce

an

d E

ase o

f A

pp

rov

al

of

CD

x

Low/ Not

AvailableScandinavia

55Menarini, headquartered in Naples, Italy, is a key company-to-watch with its

intelliPATH product offering true, end-to-end diagnostics


Company &

DeviceValue Proposition Use Case

A.Menarini

Diagnostics

intelliPATH

FLX™ (IHC, ISH)

• Intelligent scheduling software optimizes time-to-result

• Prioritized STAT slide processing for IHC results in just over 60 minutes

• 150 slides – up to 450 results with Multiplex IHC per day

End-to-End Solution: Total tissue diagnostic solution ranging from

specimen handling within theatres until final digitally assisted diagnosis.

Key features include equipment and instrumentation together with LIMS

and tracking software solution.

Leica

Biosystems

HistoCore

PELORIS 3

Premium Tissue

Processor

• World’s first easy-to-use solution with track and trace functionality launched in

2017

• Incorporated on-board reporting module and barcode scanner to relate the

samples with the reagent details, processing program, and user information

• Can accommodate up to 600 cassettes

Helps to remove manual records, while delivering advanced specimen

safety and traceability.

Allow for better reproducibility and protect the integrity of the tissue.

3DHISTECH

iSacs

• A single device for integrating immunostainer, coverslipper, and scanner

• Automatic sample detection makes only the effective sample area stained

• 72; 36 slides in 5 hours, 40 reagents

All in one immunohistochemical staining, coverslipping, and scanning

Technidata

HistoCyto

• It focuses on reducing processing and diagnosis times, enhances patient

safety and traceability.

• It also includes advanced statistics with analytics.

One solution for all aspects of the anatomic pathology laboratory

56

...

• TBC

Tissue Diagnostics

ITALY

57The Italian tissue diagnostics market comprises of 18% of the total western

European market and is forecast to grow at 4.4% CAGR


0,0

50,0

100,0

150,0

200,0

250,0

300,0

2017 2022

APLIS 17,3 24,7

PreAnalytical

50,0 57,2

AdvanceStains

153,0 191,6

Re

ve

nu

e (

$ M

illi

on

)

Tissue Diagnostics Market: Segment

Revenue Forecast, Italy, 2017–2022

Market Outlook

The Italy tissue diagnostics market comprises of 18% of the total western European market. The

tissue diagnostics market is favorable as the regional governments are focusing on early diagnosis

leading to mass cancer screening programs. Due to the strong spread of smoking among Italians

women, the diagnosis of lung cancer in female population is high: 13,600 in 2017 (+ 49% in 10

years) which creates a clear opportunity for tissue diagnostics. However, on the flipside, there is a

decline of population which is expected to decrease the screening numbers.

Workforce Demographics

The number of histopathologists in Italy is expected to be about 800–900, with most of them being

from the aged workforce. Overall, there is high need for young recruits in the pathology departments.

Reimbursement Trends

Although Italy follows a decentralized healthcare system, cancer diagnostic tests are publicly funded

and available via a network of public hospital laboratories. In Italy, pricing is determined at the

national level, but access is controlled at the local level. Both HER-2 and KRAS tests are paid for by

the pharmaceutical companies whose drugs they indicate leaving a good potential for companion

diagnostic firms such as Roche.

Brand Rank:1 2 3

Pre-analytical

Advance Stains

APLIS

Leica/Roche A.MenariniMilestone SRL

Roche Thermo FisherLeica

NoemaLife CompuGroup

Note: Traffic light indicates the level of

market favorability towards tissue

diagnostics. Red-Poor, Yellow-Cautious,

Green-Supportive

58

...

• TBC

Liquid Biopsies

59

Technology advances are enabling the development of liquid biopsy platforms


Summary of Key Technology Drivers, Global, 2017-2022

Technology Drivers Impact Analysis

Rapid Technological Advancements

Rapid advancements of across key liquid biopsy technology platforms, such as next-generation

sequencing and microfluidic assay techniques, are likely to fuel the growth and development of

unique assays techniques across a wide range of cancers and other diseases.

Growing preference for Non-Invasive

Profiling Techniques

There is a growing consumer preference to for minimally-invasive and non-invasive biopsy

techniques, especially across early screening and treatment monitoring applications. This is likely to

fuel technology innovations and biomarker discoveries for applications in liquid biopsy assays.

Need for Early Detection

The key to the management of and timely treatment of most diseases is early detection. This is

likely to fuel the growth of novel liquid biopsy platforms that facilitate early detection through tumor

profiling applications, while also enabling critical invasive biopsy and clinical management decisions

across global healthcare settings

Enhanced Assay SensitivityThe growing need to enhance assay sensitivity is likely to fuel the development of tools that

enhance the quantitation of molecular and cellular markers in liquid biopsy assays.

60Minimally invasive and non invasive liquid biopsies are primarily used for both

disease profiling and treatment monitoring applications


1

2

3

Summary

of Biopsy

Technologies

Invasive

Biopsies

Invasive biopsy techniques typically comprise

the use of endoscopic devices, biopsy guns,

manual or robotic biopsy guidance systems,

biopsy components such as needles and

forceps

Minimally

Invasive

Biopsies

Non

Invasive

Biopsies

Disease

Profiling

Disease

Diagnosis

Disease/

Treatment

Monitoring

Types of Biopsy Technologies Key Applications Areas

Focus Area: Liquid Biopsies

Minimally invasive platforms comprise the

use of blood for detecting clinically actionable

biomarkers. Biomarkers typically detected

include circulating tumor (ct) DNA. Exosomes

and circulating tumor cells (CTCs).

Non-invasive biopsy techniques use body

fluids such as urine for assessing disease

biomarkers such as ctDNA, exosomes,

microvesicles and CTCs.

Biopsy Industry:

Technology

Snapshot,

Global, 2017

61The principal liquid biopsy markers include circulating tumor DNA (ctDNA),

circulating tumor cells (CTC) and extracellular vesicles (EV)


Technological Summary of Key Liquid Biopsy Biomarkers, Global, 2017

ctDNA

CTCs

EVs

Cellular

Genomics

Transcriptomics

Proteomics

Flow Cytometry/Imaging

PCR Technologies

Next Generation

Sequencing (NGS)

Immunocytochemistry

Microfluidics

Mass Spectroscopy (MS)

TechnologiesMetabolomics

Key LB Biomarkers

Prevalent Analytical

Methods for LB Markers

Blood

Plasma

Urine

Key Liquid Biopsy (LB)

Substrates

Key LB Technologies

Serum

HPLC Techniques

Key Takeaway: While ctDNA is primarily evaluated by genomic techniques, CTCs and EVs can

be assessed using cellular genomic, transcriptomic, proteomic and metabolomic methods.

62


Use case 1

PCR-based technologies for ctDNA

Technology Overview

PCR-based technologies continue to be the most preferred method for analysis and assessment of ctDNA. There are

several variations of PCR analyses that are currently being leveraged for ctDNA detection. Some of the prevalent

techniques include real-time PCR and digital PCR. The advent of epigenetic platforms are also fueling cancer profiling

innovations and techniques such as methylation-specific (MS) PCR are fast emerging as promising methods for evaluating

ctDNA.

Future Perspectives

Post the US Food and Drug Administration (FDA) approval for Roche’s and QIAGEN’s liquid biopsy tests that leverage PCR

to detect epidermal growth factor receptor (EGFR) gene mutations in non-small cell lung cancer (NSCLC) patients, it is likely that more PCR-based in vitro diagnostic (IVD) kits may

get US regulatory approvals for companion diagnostic applications in cancer management.

Industry Impact in 2021

Advantages

PCR-based platforms allow for cost

effective and sensitive ctDNA detection.

These technologies are also capable of

absolute quantitation of mutant and wild

type DNA mutations, unlike most NGS

platforms.

Disadvantages

The primary limitation of most PCR-based

techniques that that it cannot be scaled

for comprehensive gene coverage. PCR-

based techniques are also limited by the

low signal-to-noise ratio

Technology Readiness Level 1 2 3 4 5 6 7 8 9

Several PCR-based technology platforms are commercially available for ctDNA analysis.

Some the of the prevalent technologies include Bio-Rad’s droplet digital (dd) PCR and

MDxHealth’s MS PCR technologies. Bio-Rad is also looking to combine NGS with

ddPCR platforms, which may fuel a paradigm shift in the enhancing the sensitivity of

liquid biopsy technologies.

Key Application Areas

As all liquid biopsy platforms, PCR-based ctDNA assessment techniques will also aid clinical decision related to cancer screening and treatment. However, MS-PCR platforms are likely to play a larger role in assessing tumor heterogeneity in the near future. As evident from the recent FDA approval, PCR platforms will be increasingly used for cancer companion diagnostic and personalized treatment applications.

Companies to Watch

Bio-Rad

Roche

QIAGEN

Thermo Fisher Scientific

MDxHealth

Biocept, Inc.

0

1

2 3

4

5

4.0

Low High

63


Use case 2

Cellular analytics for CTCs

Technology Overview

Cell-based technologies typically use flow-cytometry or cell culture techniques to detect tumor cells in body fluids such as blood, plasma and serum. Flow cytometric techniques for CTC

should ideally enable quick detection, as CTCs tend to be time-sensitive. Furthermore, the techniques also need to

prevent cell damage during preparation.

Future Perspectives

Existing cell counting platforms are being rapidly developed to include molecular insights by leveraging advanced genomic technologies. In the future, it is likely that the introduction of advanced imaging and genomic techniques may transform

CTC assessment for cancer profiling and treatment monitoring applications.


Advantages

Flow cytometry-based approaches allow

for enhanced sensitivity of during CTC

detection. Furthermore, flow cytometry

offer superior sample enrichment for

CTCs that are typically less abundant in

body fluids.

Disadvantages

Label-dependent methods have limited

application diversity, as cancer cell

biomarker expressions change with tumor

progression. Hence, companies such as

Rarecells offer label-independent CTC

analysis.


There are several companies that offer flow cytometric tools for CTC assessment.

Commercially available platforms use label-dependent and label-free methods for

assessment of CTCs. There are companies that allow for the structural cytology

assessment in CTC evaluation.


CTC enumeration and analysis provide valuable insights across cancer malignancy and progression, hence are likely to be useful for prognostic applications. Flow cytometry and cell culture methods enable sensitive detection of tumor cells in body fluids and will be useful for tumor profiling and prognostic applications across both, clinical and research settings.

Companies to Watch

BD Biosciences


EMD Millipore

Rarecells Company

Screencell

Abcam

0

1

2 3

4

5

4.0

Low High

64


Use case 3

Affinity capture techniques for EVs

Technology Overview

Frequently used methods for exosome separation comprise ultracentrifugation, density-gradient chromatography and

affinity capture (AC) techniques. However, microfluidics used with AC are emerging as a novel method for enhanced

exosome isolation Exosome detection methods use flow cytometry, dynamic light scattering, microscopy, plasmon

resonance and pulse sensing methods

Future Perspectives

Rapid technological advances across exosome isolation and detection methods is likely to fuel the use of exosomes for

cancer profiling and treatment monitoring applications in the near future. The stability of exosomes in most body fluids such as blood, urine, and cerebrospinal fluid is also likely to fuel its

adoption across several cancer indications.


Advantages

Nanomembrane filtration techniques are

quick and allow exosome isolation within

2 hours, as opposed centrifugation

techniques that range from 2 to 24 hours.

System Biosciences’ ExoQuick platform

enables rapid one-step exosome

precipitation

Disadvantages

Size-based purification methods, such as

nanomembrane filtration, often leads to

contamination with cell debris and other

unwanted nanoparticles of similar size.

Furthermore, ultrcentrifugation techniques

may cause co-precipitation of proteins


There are several companies that offer commercial microfluidic, centrifugation, filtration

and chromatographic techniques for exosome isolation. Furthermore, companies have

developed novel platforms for flow-cytometry, nanoparticle tracking analysis and electron

microscopy-based methods for exosome detection.


Exosome isolation is one of the most challenging step across cancer liquid biopsy assays. Rapid technological advances have enabled the development of novel methods for isolation and detection of exosomes. Exosomes isolated using such methods can be used for further analysis across research and clinical settings.

Companies to Watch

MBL International


New England Peptide

System Biosciences

Cell Guidance Systems

Exiqon

Bioo Scientific

101Bio

0

1

2 3

4

5

4.0

Low High

65

Source: Menarini, Frost & Sullivan

In Italy, Menarini Silicon Biosystems offers a US FDA-approved CTC blood test for

some colorectal, prostate and metastatic breast cancers

Menarini-Silicon Biosystems,

Inc. , Italy, a wholly owned

subsidiary of The Menarini

Group, offers precision

medicine tools to enable

comprehensive insights

across biological diseases.

In April 2017, Menarini-

Silicon Biosystems acquired

Janssen Diagnostics’

CELLSEARCH® Circulating

Tumor Cell System. The

technology platform enables

the accurate detection and

quantitation of CTCs across

a broad range of cancers.

The US FDA approved

CELLSEARCH® Circulating

Tumor Cell Test, a

diagnostic blood test, can

help enhance the

management of colorectal,

prostate and metastatic

breast cancers. The Chinese

FDA has also approved this

test for metastatic breast

cancers.

The Menarini Group has

been around for more than

130 years and has over

16,000 employees in over a

hundred countries. The

company has it’s US

headquarters in San Diego.

The Meanarinin Group is a

privately owned company

that focuses on advancing

its pharmaceutical, biotech

and diagnostic offerings in

the European and US

markets.

As cancer continues to be

the leading cause of global

mortality, it has become

increasingly important to

develop new tools for the

early detection and

management of a wide

range of cancers. Hence,

accurate and sensitive liquid

biopsy platforms hold the

potential to transform cancer

management through

enhanced personalized

treatment strategies

Company

Profile

Application

AreasTechnology

Platform

Global

Outreach

Future

Perspectives

66

...

• TBC

Blockchain Technologies

67


There are many different definitions and applications for blockchain technology

“Blockchain is a shared, immutable ledger for recording the history of

transactions. It fosters a new generation of transactional applications

that establish trust, accountability, and transparency.”

– IBM

“A blockchain is a distributed decentralized transaction ledger, saved by

each node in the network, which is owned, maintained, and updated by

each node. It's a peer-to-peer system. No central authority manages the

transaction flow.”

– PwC

“A block chain is a type of database that takes a number of records

and puts them in a block (rather like collating them on to a single

sheet of paper). Each block is then ‘chained’ to the next block, using

a cryptographic signature. This allows block chains to be used like a

ledger, which can be shared and corroborated by anyone with the

appropriate permissions.” – UK Government“Blockchain basics: A network of nodes puts transactions into blocks, and

blocks into a single chain that represents the "truth" of what has

happened. If two competing transactions happen at about the same time,

the network resolves this conflict by choosing one and rejecting the other,

so all nodes have the exact same copy of the distributed ledger.”

– Coindesk

“The blockchain is a shared distributed ledger that records and stores

digital assets. Parties can use the mechanism to transfer those assets

and proponents say its use could make it easier to keep track of

information and reduce settlement times.”

– Reuters

“Data structure" that may be time-stamped "and signed using a

private key to prevent tampering."

– US Department of Health & Human Services

“A digital ledger in which transactions made in bitcoin or another

cryptocurrency are recorded chronologically and publicly.”

– Oxford University Press

“Blockchain is a database that allows the transfer of value within

computer networks. This technology is expected to disrupt several

markets by ensuring trustworthy transactions without the necessity

of a third party.” – OECD

68

Source: Satoshi Nakamoto, Frost & Sullivan

In 2008, blockchain was conceptualized by Satoshi Nakamoto as a type of

“distributed” ledger/database used to record digital transactions

A blockchain is a new data structure that creates trusted, distributed digital ledgers for assets and other data. It is an immutable record of digital

events shared peer to peer between different parties. It can only be updated by consensus of a majority of the participants in the system and, once

entered, information is very hard to erase.

The rise of blockchain opportunities has been enabled by breakthroughs in cryptography and computing, the tipping point of which was the 2008

paper introducing Bitcoin. Blockchains can exist in public or private/consortium varieties, each having its own unique trade-offs. 3

Blockchain is a type of distributed/decentralized ledger/database used to record digital transactions.

Properties

of Blockchain

Technology

Transactions that satisfy

certain conditions are

recorded, eliminating a

central administrator or

third-party intermediaries

Peer-to-Peer Network

Network of replicated databases,

synchronized through the Internet and

visible to users/miners within the network

Decentralized

Transactions added to the blockchain are irrevocable or immutable

Crypto-graphically Secured

Network requires consensus, which allows for

transactions to occur between unknown parties

Trusted

Avoids double counting and allows

transactions to occur automatically

Automated

69


In the healthcare industry, blockchain has a broad range of potential use cases

Blockchain Technology Adoption Timeline Across Major Healthcare Applications/Use Cases, Global, 2016–2025

Immediate

(2016–2018)

Short-term Future

(2018–2021)

Long-term Future

(2021–2025)

Claims Adjudication & Billing Management/

RCM

IoMT (medical asset management and device

data exchange)

IoMT

(Quantified self, home care)

Drug Supply Chain Provenance (drug

counterfeiting and theft)

Smart Contracts (health vendors RFPs and

contract management)Universal Health Records and Identities

Digital Identity Verification/ Management Health Token (HSN, research, wellness

incentives)

Genomics and User-generated Data

Management

National Medical/ Health

Records (authenticity and integrity)

Managing Pharma/Biopharma IP and Assets

Transactions on BlockchainBlockchain AI and AR/VR Applications

eConsenting

(Research and clinical trials) Clinical Trials Records Integrity and Exchange Blockchain-based Wellness, Personal Coaching

Healthcare Data Storage, Access, and Analytics

(on/off Blockchain)

Regulatory Audit and Adverse Event Safety

MonitoringHealth Policy Voting

Blockchain-based Learning Health Systems and

Advocates

1

2

Note: Blockchain system adoption across these healthcare use cases demonstrate more convincing

opportunities, albeit at varying degrees of adoption across countries and health systems.

Key: Certainty of Adoption

High Medium Low

70


Use case 1a

Claims Adjudication & Billing Management

• Insurance notarization and medical billing frauds: An estimated 5%–10% of health care costs are fraudulent, resulting from

excessive billing or billing for non-performed services. For example, in the United States alone, a Medicare fraud scheme incurred

about $30 million in losses during 2016.

• Inefficiencies with BIR activities: An estimated 15%–20% of health care spending and processing costs are associated with BIR

activities. E.g., US BIR costs are projected to reach $315 billion dollars by 2018, up over 100% from 2007.

Current

Challenges

1

Blockchain Opportunity for Healthcare Industry

Key Features

• Automates claim adjudication and

payment processing.

• Blockchain network consensus enables

disintermediation and trustless

exchange with predefined smart

contracts.

• Peer-to-peer insurance: Peer-evaluated

and peer-adjudicated health claims.

• Pay for outcomes and incentive-based

behavioral health programs, leveraging

smart contracting features.

Patient

Providers

Insurance

Payers Potential Benefits for Healthcare Stakeholders

• Significantly improve inefficiencies in BIR activities; help reduce administrative cost and time for providers and payers by eliminating middlemen or intermediaries.

• Smart contrasts to maintain a benefits database, determining patient insurance for self-execution as per pre-programmed terms and conditions.

• Patients will be better informed of projected costs and experience the benefit of providers utilizing historical clinical

service information.

• Direct payment of incentive and health tokens toward positive and healthy behavior and other adherence programs.

• Providers can reduce the number of disputes/ frauds regarding claims settlement by eliminating the human judgment

factor to speed up claim processing.

• Improve healthcare revenue cycle management (RCM) and reduce payment inefficiencies for providers.

Selected

Examples

Gem Health, a provider of blockchain application platforms for enterprises, has collaborated with

Capital One to develop blockchain-based healthcare claims management and RCM solutions.

Reinsurance Group of America (RGA), one of the largest global life and health reinsurance

companies has joined B3i Consortium and aims to leverage blockchain to swap

insurance contracts as a means of risk management and other

minimum viable products such as claims and underwriting.

71


Use case 1b

Claims Adjudication & Billing Management

Blockchain Use cases and Benefits: Selected Health Insurance Value-Chain and Key Activities, Global, 2016–2025 1

Product

Management

Marketing

Sales &

Distribution

Underwriting

& Risk

Management

Policy

Acquisition &

Servicing

Finance &

AccountsClaim

Management

New product venture

such as DAO-based

peer-to-peer insurance

Decentralized marketplace—

multi-signature independent

agent contracts

Automated underwriting

and policy insurance

Improved claimant and

beneficiary KYC

Automated claim

processing

Cost and process

optimization through

disintermediation

• Increase trust of

customers due to

open, distributed

system

• Reduce cost related to

commission, sales, and

operations

• Reuse platform for other

types of insurance

• Include external data for

(semi-) automatic pricing

• Improve customer insights

• New distribution channels

(P2P, online, social media)

• Reduce cost of

operations

• Use blockchain as a

reliable registry for on-

demand / usage-based

insurance or micro-

insurance

• Automate payments

through smart

contracts evaluating

conditions for paying

out claims

• Use blockchain for on-

boarding new

customers or

verification of

policyholder identity

• Lower lapse rates by

proactively dealing with

customers at risk to

lapse

• Automate payments

through smart contracts,

evaluating conditions for

paying out claims

• Reduce cost and

increase speed for

payments

• Improve identification of

claim events and

reduce average claims

cost and risk

management

• Reduce admin costs

• Automate and increase

reliability, auditability,

and speed for financial

instrument transactions

based on defined

events

• Use smart contracts to

automatically determine

pay-outKey B

en

efi

ts

High Low

Key: Potential Impact/Opportunity

72


Use case 2a

Drug Supply Chain Provenance

• Drug Counterfeiting and Theft: Pharmaceutical companies incur an estimated annual loss of $200 billion due to counterfeit drugs

globally. About 30% of the drugs sold in developing countries are considered counterfeit. On an average, medicines worth $33.5

million are stolen in cargo theft each year in EU markets.

• Optimize Contracts and Outsourced Activities: Outsourcing contract research and manufacturing services globally highlights

administrative, legal, ethical, financial, and staff-related issues.

Current

Challenges

1

Blockchain Opportunity for Healthcare Industry

Key Features

• Drug Supply Chain Provenance:

Blockchain-based chain-of-custody

log to track each step of the supply

chain by individual product/drug.

• Remote process auditing with the

blockchain’s verifiable source of

truth.

• Improve pharmaceutical supply

chain finance (authenticity of

transaction, lower credit risk, faster

payment cycles).

Patient

Providers

Insurance

PayersPotential Benefits for Healthcare Stakeholders

• Ensure data integrity and improve drug traceability across the supply chain; check drug counterfeiting,thus reducing industry losses.

• Optimize overall marketing efforts and workflows.

• Enable remote monitoring and audits with right permissions and accessibility controls for emergency situations and high value outsourced activities.

• Health authorities and regulatory institutions can implement proof of identity (or license) to minimize entry of

counterfeit drugs into the country and robust reporting structure for Adverse Drug Reactions (ADRs) to safeguard

citizens.

• Provide a retail-like buying experience both for prescription and OTC drugs.

• Directly participate in medication adherence and loyalty programs to avail incentives.

Selected

Examples

iSolve LCC is working with multiple pharma/biopharma companies to implement its Advanced Digital Ledger Technology (ADLT)

blockchain solutions to help manage drug supply chain integrity.

IBM and China-based supply chain manager Sichuan Hejia have launched the

“Yijian Blockchain Technology Application System,” a supply

chain financial services platform to purchase and

pay for pharmaceuticals.

73

Source: Frost & Sullivan*Not exhaustive

Use case 2b

Drug Supply Chain Provenance

Blockchain Use Cases and Benefits: Drug Supply Chain and Key Entities Involved*, Global, 2016–2025

Distribution, Sales and MarketingManufacturing

Each batch of API/ raw

material is verified, serialized,

and stored on blockchain at

the feedstock level.

Each drug with unique

codes is stored and

tagged to the same

blockchain log.

Wholesaler verifies the

origin of the drug; the

transaction is verified, and

added to the blockchain

The pharmacist verifies the




The patient verifies the




API and Raw

Material Supplier

Pharma Manufacturer/

CMO and CDMOs

Wholesale

Distributors

Pharmacist

and Retailers

Patient/

Consumer

Key B

en

efi

ts

• Immutable hash (#) created on the blockchain helps in

the automating serialization and geo-tagging process

across production, development, and testing by

manufacturing facilities.

• Smart contracts to automate the auditing of outsourced

contract manufacturing process and quality compliance

with the blockchain’s verifiable source of truth.

• Blockchain-based smart contracts enable autonomous

applications for due diligence, inventory management,

and recall process.

• Implement electronic regulatory submission

interoperable system for marketing authorization

submissions and updates to global regulatory authorities.

• Blockchain-based chain-of-custody log to track each step of the supply chain by individual raw

martial/drug level.

• Maintain immutable historical records of products to detect counterfeit and substandard products and

identify the responsible party.

• Verify the supply chain provenance with real-time disclosure and alert systems of the entire product path

both up or down the supply chain.

• Increase visibility for estimating the impact of various marketing alliances and promotion campaigns such as

rebates, co-paid ads, and coupons while boosting sales by individual drug.

• More efficient post-marketing process such as Adverse Drug Reactions (ADR) and safety monitoring.

• Medication adherence programs and incentive management.

• Help in leveraging post-marketing research findings as an input for future R&D,

especially for precision medicine.

• Provide new marketing channels (e.g., online

sales; direct to consumer).

74

...

• TBC

Clinical Trial Solutions

Remote Recruitment/

Monitoring Solutions

75


The Clinical Trial Data Management market includes hardware, mobile and software

solutions that support Phase I-III clinical trials

• The Clinical Trial Data Management (CTDM) and eClinical solutions market includes hardware (sensors/devices), mobile applications, Platform-

as-a-Service (PaaS) and other IT solutions and software that support clinical trial operations and data management across Phase I to III

operations of pharmaceutical and biotechnology companies

• Digital technologies and solutions for drug discovery, preclinical, clinical trial patient recruitment and remote monitoring IT solutions, and real-

world evidence (post-marketing) IT solutions or operations do not fall within the scope of this report

Prototype Design and Development

Preclinical Clinical Phase I Clinical Phase II Clinical Phase IIIPhase IV HEOR and

PV Services

Drug Discovery and Development Clinical Trials and Development Real-World Evidence

Clinical IT/eClinical Solutions

Clinical Trials OperationClinical Data Management

& eSourceOthers Converging Technologies

• Social Media

• Crowdsourcing Platforms

• mHealth (Wearables/

Smartphones/ Devices)

• EDC/CDMS

• eCOA/ePRO

• Cloud Storage

• Clinical Informatics/Analytics

• CTMS

• IRT/RTSM

• Trial Planning/Safety

• eTMF

• Blockchain

• Artificial Intelligence (AI)

• Internet of Things (IoT)

Focus

Selected solutions

76


Digitization will be key to capturing opportunities and negating challenges

1 2 3

4 5 6

Continuing Clinical Trial Challenges

Digitization can resolve the challenges

related to high trial costs, need to

streamline trial processes, and

demonstrate real-world efficacy

Clinical Trial Enrichment

Existing regulatory standards

are complex Digitization can

manage the complete process

of collection, cleaning and

management of clinical trials

Entry of Non-traditional Players

Entrants are providing alternate

business models that complement and

challenge the existing business models

Focus on Patient Centricity

Focus on Patient CentricityThe rising trend

of healthcare

consumerism heightens

the need for patient-centric

clinical trial models. Digital tools

have huge potential to bring

patients and physicians closer

Evolving Clinical Trial Models

Digitization enables the shift away from

centralized (high-cost and difficult-to-

access settings) models to more virtual

models (patient-centric and efficient)

Digital Continuity

The existing information systems

are disjointed and lack the

agility to support complex

businesses Digital continuity

provides the framework and

transparency required throughout

the drug’s lifecycle, from discovery

to post approval

77

Source: Accenture Research, Frost & Sullivan

Clinical trial challenges include escalating costs and recruiting patients

Clinical Trial Success Rates

• The overall likelihood of approval (LOA) from Phase I to all developmental candidates is 12%

• Phase 2 continues to have the lowest success rate, with 30% probability

Escalating Costs

• Participant eligibility criteria and trials procedures increased by 58% since 2000

Expanding Trial Duration

• Treatment period increased by 25% since 2000

Clinical Trials IT Solutions: Key Trends, Global, 2016–2020

Clinical Trials IT Solutions: Key Challenges and Benefits of Digital Tools, Global, 2016–2020

Clinical Trial Challenges Benefits of Digital Tools

High site-related costs ⎯ recruitment, retention, and monitoring account for ~30% of

trial costs

Reduce cost (up to 10%) with remote management and training. Site identification

using analytics and aggregated databases

Low patient recruiting rate – 50% of all trials fail to achieve planned patient

enrollment strategies ~200% delays in recruiting timelines

Reduce patient recruitment timelines on a scale of from first enrolment to last

patient first visit time.

Challenges in precision medicine trials relating to targeted patient recruitment,

emerging trial design, and evolving policies

Technological and scientific advancements in biomarker-based patient recruitment

and trial design will augment precision medicine trials

78


The global CTDM market was valued at $2.5b in 2016 and is expected to reach

$4.1b in 2022 which results in a revenue CAGR of 12.3%

CTDM and eClinical Solutions Market: Market Forecast, Global, 2016–2020

-500,0

500,0

1.500,0

2.500,0

3.500,0

4.500,0

2016 2017 2018 2019 2020

Trial Planning/Safety 134,1 148,1 163,6 180,8 199,9

Biostatistics Services 363,3 400,4 442,4 490,2 544,6

eCOA/ePRO 369,5 425,5 490,5 565,6 652,4

CTMS 497,3 550,9 612,3 683,5 764,3

RTSM/ IRT 515,3 575,3 643,1 719,3 805,0

EDC/CDMS 665,2 750,3 847,5 959,0 1.085,3

Ma

rke

t S

ize

($

Mil

lio

n)

Year

79


From a supplier perspective, the landscape is fragmented with only a handful of

tier 1 vendors offering integrated e-clinical solutions

Unified/Integrated eClinical Solutions Vendors (Tier-1)

Medidata, Oracle, Prarexel Informatics, Veeva Systems, OmniComm, Bioclinica, ArisGlobal

RTSM/ IRT

Almac

BioClinica

4G Clinical

Cenduit

ClinPhone

Endpoint Clinical

CTMS

Capterra

Bio-Optronics

DATATRAK

DSG

eClinForce

Forte Research

EDC/CDMS

OpenClinica

DATATRAK

Medrio, Inc. ClinCapture

TrialMaster

RedCap

eCOA/ePRO

ERT

CRF Health

Bracket

DATATRAK

DSG

Almac

Protocol Design

and Review

Vital Crowd

ProofPilot

HealthVibe

AllTrials

Site Selection

and Start-up

Gobalto

QuintileIMS

TriNetX

Covance

PPD

Patient

Recruitment

Trialx

DEEP6

CLINPAL

Patientlikeme

Langland

RBM (S/W)

Comprehend

CluePoints

JMP Clinical from

SAS

Cyntegrity

OPRA

Virtual Trials: eClinicalHealth Limited, Science 37, MEDABLE, aces HEALTH, THREAD Research, monARC, mytrus, evidation Health (Services)

Non-Traditional

Vendors

Drug Supply

CluePoints

JMP Clinical from

SAS

Cyntegrity

Almac

Tie

r 2

T

ier

3

Google

Intel

IBM

Cognizant

HCL

TCS

Fitbit

Fitabase

Validic

Vital Connect

Qualcomm

Apple

Oth

er

ITE

S

Com

pa

nie

s

Dig

ita

l B

iom

ark

er

Colle

cto

rs

80


In the largest Electronic Data Capture segment, systems are moving to active

integration hub to complement unified eClinical solutions

Key Business

Objective

Designed to deal with paper systems

and large data entry volumes

Designed to deal with electronic records and

facilitates remote data entry at sites

Data is entered directly into the EDC system to

increase process efficiency and data integrity

Process • Write a protocol

• Collect data on paper CRF

• Enter data into a CDM system

• Automated protocol publishing system

• Data first recorded on paper and transcribed into

an eCRF

• Simultaneously build EDC database structure,

collect, and clean data

• Automated protocol publishing system and eCRF

libraries

• Direct entry of multiple eSource data via PCs, tablets,

smartphones

• Data is immediately available for review and

monitoring on EDC

Key Data

Types

Investigator-led clinical data;

Lab data

Investigator-led clinical data; lab data

integrated system data (CTMS; eCOA/ePRO;

EMR/EHR)

Investigator-led clinical data; lab data; integrated system

data; remote monitoring data (mHealth, wearables and

biosensors)

Delivery

Mode

On-premise/Web hosted/

Licensed enterprise

Web hosted/ Licensed enterprise

cloud-basedCloud-based modular EDC solutions

Offerings Hardware and software SaaSInfrastructure-as-a-Service (IaaS)/ SaaS/ PaaS/ Cloud-

as-a-Service

Pricing

Models

Buy/ Licensing

(off-the-shelf application package)Licensing/ Subscription Pay-per-use/ pay-as-you-go

Vendors/

Systems

Oracle Clinical CDMS

Phase Forward CDMS Clintrial™

Oracle - InFrom

Medidata – Rave

OpenClinica

Oracle – Clinical One

Medidata RaveX

Driving

Factors eCRF + eSource + EDC

(Integrated EDC/CDMS)

FutureCurrent

Paper + eCRF+ EDC

(Standalone EDC/CDMS)Paper-based CRF + CDM

Past

81


Esource and EDC technologies offer the opportunity to save time and cost

Key Areas Current Challenges of Paper + EDC Systems Key Benefits of eSource + EDC Systems

Cost-saving

• Traditional systems that manually record clinician- and

patient-reported data and then transcribe into an eCRF

often have high printing, logistics, and overhead costs.

• Paper-based EDC systems increase the need for SDV

rates, which account for 10%-14% of the overall trial cost.

• Integrated EDC systems with eSource solutions provide a single

source of truth and help optimize costs by eliminating duplicate data

entry as well as reducing on-site verification and SDV rate.

• For example, Novartis reported cost savings of $17 million by

avoiding printing CRFs on carbonless paper for 400 clinical trials.

Time-saving

• Database lock time with conventional paper-based EDC

systems take 8-10 weeks.

• Manual data entry for clinical trials is a time-heavy and

error-prone process.

• EDC systems designed as the core data hub for all possible site and

eSource-captured data could potentially help clinical trial sponsors

and CROs reduce the monitoring time by nearly 40%.

• Integrated EDC solutions improve data quality, expedite data entry

workflow, and could provide an overall 30% reduction in clinical

development time.

Cleaner Data

• Clinical trials staff spend 67% of their time cleaning and

validating captured trials data.

• Based on industry estimates, paper-based transcription

error rates can be 1.2/1000 for double data entry and

5.91/1000 for single data entry per CRF page.

• EDC enables eSource data verification and edit checks at the point of

data collection and lowers query management (possible data error)

by 65%-70%.

• It provides real-time access for data review process to improve

collaboration among sites, sponsors, CROs, and patients. It assists in

tramlining the data collection process, reducing the number of

queries, and driving greater site protocol compliance.

82

...

• TBC

Appendix

83


IoT highlights (1/2)

Across hospitals, medical devices are increasingly connected and integrated

Hospital-based Medical Device Connectivity Market: Evolving Segments, Global, 2017–2022

Hospital Device

Connectivity

(MDIS)

Device Data Integration with

Mobile Clinical

Communication System

Clinical Alarms & Alerts

Based on EWSS

(High-Acuity & Low-Acuity)

IoMT - Connected

Point-of-Care (PoC) Devices

Cloud-based Virtual

Device Data Dashboards for

non-EMR Clinics and Hospitals

Cloud based (or) SaaS

EMR with built-in

Device Connectivity & Analytics

Virtual ICUs &

Clinical Surveillance

Advanced Clinical Decision

Support System

84


IoT highlights (2/2)

The ‘Internet of Medical Things’ is set to revolutionise the way HC is delivered

IoMT—Connected Point-of-Care (PoC)

Devices, Global, 2017–2022

IoMT

Connected

PoC

2017 2018–2020 2021–2022

M M H

Cloud based (or) SaaS EMR with Built-in Device

Connectivity & Analytics, Global, 2017–2022

Cloud based

EMR with Built-in

Connectivity

2017 2018–2020 2021–2022

M H H

• The ‘Internet of Medical Things’ (IoMT) is set to revolutionise the

way healthcare is delivered; a network of medical devices can

provide limitless possibilities of applications which can improve care.

• IoMT can enable continuous monitoring irrespective of the presence

of healthcare professionals, and even alert them when necessary.

• Diagnosis, monitoring and treatment can occur regardless of patient

location, enabled by IoMT.

• At present, the EMR does not have a built-in device connectivity

capability and a third-party ad-hoc device connectivity is the

compromise solution.

• Development of a manual interface is required to ensure seamless

data exchange from devices to medical records. The HL7 integration

standard was built to include many options and exceptions.

• Enterprise EMRs will offer built-in connectivity through centrally

hosted device libraries that readily acquire data from devices for

direct integration with patients’ EMR and derive reports based

on analytics.

Impact Ratings: H = High, M = Medium, L = Low

85


Circular economy highlights (1/2)

By 2020, 2-3% of drug and device companies’ revenues will stem from PaaS

Image: Thinkstock, Frost & Sullivan Database

Product as a Service (XaaS) Model will open new revenue streams, driving future sustainability for the

healthcare industry. It will contribute 2-3% revenue for leading drug and devices companies by 2020.

Key Trends/Themes:

• Healthcare is increasingly shifting toward innovative PaaS and DaaS models, beyond the

product strategy.

– Med Tech Example: Medtronic Hospital Solutions; Philips Lumify Ultrasound subscription model

– Pharma Example: GSK’s “dial in” digital platforms; AstraZeneca's Day-by-Day coaching service

• These shifting industry paradigms will lead to greater opportunities and partnerships for

biopharma, medical device and diabetes management companies in 2018.

Key Trends/Themes:

• Accompanying this transition toward services (XaaS) focused business models, funding/spend/revenue will continue the shift

from CapEx to OpEx as relates to IT enablement of desired business outcomes.

• Data Monetization: Turning data into actionable outcomes will be new sources of innovation and

service-oriented future revenue streams - differentiation via intelligent solutions/services for

evidence/outcome-based health benefits to demonstrate value to end-users.

86


Circular economy highlights (2/2)

Device players in particular are moving from a product to a “solution” model

• Sell Parts/Hardware

• Consumables/Upgrades

• Repair/Maintenance Support

• Leasing and Buying Support

• Product-as-a-Service

• Data-as-a-Service

• Platform-as-a-Service

• Managed Services

• Insight-as-a-Service

• Automation-as-a-Service

• Robotics-as-a-Service

Medical Products Medical Platforms Medical Solutions

Evidence-based Care Outcome-based Care Predictive & Preventive Care

Products

Services

ProductsProducts

Services

Intelligence

Near Term Mid Term Long Term

Enabling Technologies

Robotics

Artificial Intelligence

A/V Reality

87

Principal abbreviations (1/2)

AC Affinity Capture CZT Cadmium Zinc Telluride

ADR Adverse Drug Reaction DCT Digital Chest Tomosynthesis

AI Artificial Intelligence DD Droplet Digital

AMR Age-Related Macular Degeneration DTC Directly To Consumer

APLIS Anatomical Pathology Laboratory Information System eCOA Electronic Clinical Outcome Assessment

AR/VR Augmented Reality Virtual Reality eCRF Electronic Case Report Form

BAS Building Automation System EDC Electronic Data Capture

BPH Benign Prostatic Hyperplasia EGFR Epidermal Growth Factor Receptor

CDMS Clinical Data Management Solution EHR Electronic Health Record

CDx Companion Diagnostic EMR Electronic Medical Record

CRF Case Report Form ePRO Electronic Patient Reported Outcome

CRO Contract Research Organisation eTMF Electronic Trial Master File

CT Circulating Tumor EU European Union

CT Computed Tomography EV Extracellular Vesicle

CTC Circulating Tumor Cell FDA Food and Drug Administration

CTDM Clinical Trial Data Management FTE Full Time Equivalent

CTMS Clinical Trial Management System H&E Hematoxylin and Eosin

88

Principal abbreviations (2/2)

HIMS Healthcare Information and Management Systems NGS Next Generation Sequencing

HPLC High-Performance Liquid Chromatography NSCLC Non-Small Cell Lung Cancer

HVAC Heating, Ventilation and Air Conditioning OEM Original Equipment Manufacturer

IaaS Infrastructure-as-a-Service OTC Over The Counter

IHC Immunohistochemistry PaaS Platform-As-A-Service

IoMT Internet of Medical Things PCR Polymerase Chain Reaction

IoT Internet of Things PET Positron Emission Tomography

IRT Interactive Response Technology PMT Photomultiplier Tube

ISH In-Situ Hybridization POC Point Of Care

IVD In Vitro Diagnostic RCM Revenue Cycle Management

LED Light-Emitting Diode RTSM Randomization & Trial Supply Management

LIMS Laboratory Information Management System SaaS Software-As-A-Service

M Million SAM Senescent-Associated Macrophages

MES Managed Equipment Service SiPM Silicon Photomultiplier

MRI Magnetic Resonance Imaging SPECT Single-Photon Emission Computed Tomography

MS Mass Spectroscopy US United States

MVS Managed Vendor Service VC Venture Capital

89

...

• TBC

For further details on Frost & Sullivan’s coverage and services,

please contact Livio Vaninetti, Director of Frost & Sullivan Italy

[email protected]

August 2018

[email protected]

for further information about this report please contact

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