Asia Pacific Healthcare Outlook
       Focus : Malaysia
    Analysis of Best Opportunities



            4th February 2010
AGENDA



 1.   Overview of Healthcare Market : Key Takeaways


 2.   In-depth Sectoral Analysis, APAC and Malaysia


 3. ...
AGENDA




 1.   Overview of Healthcare Market : Key Takeaways


 2.   In-depth Sectoral Analysis, APAC and Malaysia


 3....
Setting the Scene
 Outlook for Healthcare Industry from 2010-12



            Global Healthcare Market : 2009        Glob...
Global vs. APAC: The New Frontier
 By 2012 APAC expected to be close to 27% of global market


                        Glo...
Asia is however transitioning
 Moving toward a Multi–Polar World Order



                 Asia Pacific Market : 2009     ...
AGENDA




 1.   Overview of Healthcare Market : Key Takeaways


 2.   In-depth Sectoral Analysis, APAC and Malaysia


 3....
APAC Pharmaceuticals & Biotechnology Market
Earlier diagnosis improves disease management and length of therapy




   Pha...
Malaysia Pharmaceuticals & Biotechnology Market
Growth of cancers and lifestyle diseases propel the market



Pharma & Bio...
Top Growth Opportunities : Malaysia Pharmaceuticals
and Biotech Market
                            Malaysia generics marke...
APAC Medical Devices Market
Transition to a mindset of monitoring



Medical Devices Revenues, US$ Bn, 2009-2012
         ...
Malaysia Medical Devices Market
Growing demand for disposables buoys up market



   Medical Devices Revenues, US$ Mn, 200...
Top Growth Opportunities : Malaysia Medical Devices
Market


                  Paradigm shift towards wellness and prevent...
APAC Clinical Diagnostics Market
Shift in business model from instrumentation to service revenues



 Clinical Diagnostics...
Malaysia Clinical Diagnostics Market
Screening for infectious diseases


 Clinical Diagnostics Revenues, US$ Mn, 2009-2012...
Top Growth Opportunities : Malaysia Clinical Diagnostics
Market


                   Opportunities in laboratory automatio...
Asia Pacific Life sciences and Health IT Market*
   Interoperability challenges hinder adoption



  Lifesciences & Health...
Malaysia Health IT Market
 Government focus on improved healthcare delivery


   Health IT Revenues, US$ Mn, 2009-2012
   ...
Top Growth Opportunities : Malaysia Health IT Market


                                      Spending on core clinical app...
APAC Medical Imaging Market
Turnkey projects drive double digit growth in Asia



Imaging Market Revenues, US$ Bn, 2009-20...
Malaysia Medical Imaging Market
Focus on digitization


 Medical Imaging Revenues, US$ Mn, 2009-2012
                     ...
Top Growth Opportunities : Malaysia Medical Imaging Market


                   Malaysia PACS market 2010 : ~US$ 5.6 mn; C...
Malaysia Healthcare Services Market
Opportunity in Healthcare Real Estate Market

                                        ...
Malaysia Healthcare Services Market
                      Opportunity in Healthcare Real Estate Market


Projected Valuati...
AGENDA



 1.   Overview of Healthcare Market : Key Takeaways


 2.   In-depth Sectoral Analysis APAC


 3.   Summary : Be...
Where to place your bets in 2010- 2012 : APAC and
Malaysia

                                                              ...
Thank You




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Asia Pacific Healthcare Outlook, Focus: Malaysia

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Frost & Sullivan analysis of the Asia Pacific Healthcare Outlook.

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Asia Pacific Healthcare Outlook, Focus: Malaysia

  1. 1. Asia Pacific Healthcare Outlook Focus : Malaysia Analysis of Best Opportunities 4th February 2010
  2. 2. AGENDA 1. Overview of Healthcare Market : Key Takeaways 2. In-depth Sectoral Analysis, APAC and Malaysia 3. Summary : Best Opportunity Analysis, APAC and Malaysia 2
  3. 3. AGENDA 1. Overview of Healthcare Market : Key Takeaways 2. In-depth Sectoral Analysis, APAC and Malaysia 3. Summary : Best Opportunity Analysis, APAC 3
  4. 4. Setting the Scene Outlook for Healthcare Industry from 2010-12 Global Healthcare Market : 2009 Global Healthcare Market : 2010-12 • US and Europe were impacted in a • Recovery of the markets to a large major way by global crisis extent with strong growth in Asia • Asia also slowed down but not as much • Start of major patent expiries as the West • M&A activity down in the West but could • Valuations were low and M&A was high, be important in Asia, restructuring will many smaller Biotech companies continue struggled • Asia becoming increasingly important as a market and outsourcing hub • Major organizational restructuring occurred, along with portfolios being • 5Ps to drive market: Preventive, reassessed Preemptive, Personalized, Predictive, Personal Responsibility 4 Source: Frost & Sullilvan ,2010)
  5. 5. Global vs. APAC: The New Frontier By 2012 APAC expected to be close to 27% of global market Global & APAC Healthcare Revenues US$ Bn, 2009-2012 1800 1600 CAGR 1400 Rest of the World 6.47% 1282 1218 1157 APAC 1200 1062 1000 800 815 880 906 934 600 CAGR 400 12.2% 200 348 247 277 311 23.2% 23.9% 26.4% 27.2% 0 2009 2010 2011 2012 Source: Frost & Sullivan • By 2015 APAC could represent ~40% of global market! 5 Source: Frost & Sullilvan ,2010)
  6. 6. Asia is however transitioning Moving toward a Multi–Polar World Order Asia Pacific Market : 2009 Asia Pacific Market : 2012 • A shift in the center of the world • Slowing down of GDP in mature economically and strategically to Asia markets – Japan and Australia took a big hit • Asia to move from export led development to consumption led growth • Global consolidation left a difficult mess for integration on a local level – job • APAC the fastest growing pharma market losses and portfolio realignment and API production hub • Price cutting and playing the margins • Increased government attention to primary game and community based healthcare. • The bubble burst for Medical Tourism • Increased use of mobile technology in healthcare service delivery • Asia started to set up infrastructure for offshoring and outsourcing for US/EU • 2010 : Malaysia Innovation and Creativity companies year 6 Source: Frost & Sullilvan ,2010)
  7. 7. AGENDA 1. Overview of Healthcare Market : Key Takeaways 2. In-depth Sectoral Analysis, APAC and Malaysia 3. Summary : Best Opportunity Analysis, APAC 7
  8. 8. APAC Pharmaceuticals & Biotechnology Market Earlier diagnosis improves disease management and length of therapy Pharma & Biotech Revenues, US$ Bn, 2009-2012 Market Drivers 1200 CAGR 1100 6.6 % Long term use of multiple and specialized 1000 909 drugs for the ageing population 900 866 825 Government support for generics and 800 750 Rest of the biosimilars 700 649 World Enhanced diagnosis and management in 600 621.5 636 570 oncology, cardiovascular, pain etc 500 APAC 400 300 CAGR 200 12.9 % 260 Market Restraints 100 180 203.5 230 0 2009 2010 2011 2012 Unresolved political and regulations issues 24.6% 28.5% Quality concern of generics & counterfeits APAC Share Government tenders favour local manufacturers Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan 8
  9. 9. Malaysia Pharmaceuticals & Biotechnology Market Growth of cancers and lifestyle diseases propel the market Pharma & Biotech Revenues, US$ Mn, 2009-2012 Market Drivers • Growing demand for lifestyle diseases drugs e.g. cancer, cardiovascular, diabetes • Drug price controls lacking in private sector • Strong government support for generics Market Restraints Large number of counterfeits and concern for quality of generics Growing usage of traditional/herbal medicine Push of clinical studies for Bioequivalence 9
  10. 10. Top Growth Opportunities : Malaysia Pharmaceuticals and Biotech Market Malaysia generics market 2010 : ~ US$ 416 mn; CAGR ~ 8% Generics 80% in terms of volume but only 40% in terms of sales revenues Opportunities for domestic manufacturers of good quality generics to expand or consolidate 0 for greater economies of scale Malaysia Cardiovascular market 2010 :~ US$ 100mn. Over 16% of all deaths caused by heart Cardiovascular and pulmonary circulation disease and metabolic Malaysia Alimentary tract & Metabolic diseases market 2010 ~ US$ 95 mn diseases Prevalence of diabetes : 2010 : ~1.8 mn. Large potential for diagnosis and treatment as nearly 80% of persons with diabetes are undiagnosed 0 Malaysia Herbal/Traditional products market 2010 : ~ US$ 165 mn; CAGR ~ 15% Nutraceuticals Strong potential to develop novel nutraceuticals from inadequately investigated biodiversity Push for clinical studies for proof of efficacy Malaysia Oncology market 2010: ~US$ 30 mn Oncology Growth from early diagnosis of cancers and targeted therapy in top 3 types of cancer: lung cancer, breast cancer and colorectal cancer 0 Source: Frost & Sullivan. 10
  11. 11. APAC Medical Devices Market Transition to a mindset of monitoring Medical Devices Revenues, US$ Bn, 2009-2012 Market Drivers 350 •Safety, accuracy, efficiency, cost 300 CAGR •Silver industry devices 5.8% 227.5 240.7 250 215 203 Rest of the •Convergence of devices and pharma products 200 World 150 163.7 171 178.4 APAC 156.5 100 Market Restraints CAGR 10.2% 50 46.5 51.3 56.5 62.3 •Regulatory and reimbursement hurdles 0 2009 2010 2011 2012 •Lack of sufficient distribution networks 23.8% APAC Share 25.8% •Inadequate training/certification for allied staff Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan 11
  12. 12. Malaysia Medical Devices Market Growing demand for disposables buoys up market Medical Devices Revenues, US$ Mn, 2009-2012 Market Drivers • Growing global demand for disposable surgical products • Growth in cardiovascular disease and orthopedic procedures • Strengthening of legal framework for IP for medical devices manufacturers Market Restraints • Medical Devices Act to be fully implemented in 2010- unregistered companies may no longer be able to supply products •Distribution challenges in rural areas restricts growth 12
  13. 13. Top Growth Opportunities : Malaysia Medical Devices Market Paradigm shift towards wellness and prevention drives the market for health 0 Self monitoring monitoring products e.g. glucose meters, blood pressure meters, etc devices Silver industry needs drive self monitoring segment ; in 2010~ 1.3 mn Malaysians aged 65 years + Increasing number of infectious diseases & hospital acquired infections e.g. H1N1, MRSA, resulting in a strong move toward disposables Disposables Malaysia manufacturers already implement technological advances in 0 disposables esp. medical gloves, catheters, etc Opportunities to set up design & manufacturing innovation clusters for high end medical devices e.g. cardiovascular, orthopedic implants, etc Implants Under Industrial Malaysian Plan 3 US$ 234 M (RM 800 mn) targeted as investment in medical devices/equipment for 2010 0 Source: Frost & Sullivan. 13
  14. 14. APAC Clinical Diagnostics Market Shift in business model from instrumentation to service revenues Clinical Diagnostics Revenues, US$ Bn, 2009-2012 Market Drivers 60 CAGR 6% Lab automation 50 46 43.4 40.9 Home care monitoring 38.6 40 Rest of Emphasis on early detection the World 30 33.6 35.6 37.5 31.7 APAC 20 CAGR 7.3% Market Restraints 10 6.9 7.3 7.8 8.5 0 High cost of genomics and proteomics tests 2009 2010 2011 2012 Mutually exclusive target customers 17.8% 18.5% APAC Share Reimbursement issues Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan 14
  15. 15. Malaysia Clinical Diagnostics Market Screening for infectious diseases Clinical Diagnostics Revenues, US$ Mn, 2009-2012 Market Drivers Growth in chronic and metabolic diseases drives increased use of molecular testing Increased number of screenings for infectious diseases e.g. HIV, tuberculosis, dengue Market Restraints Market still centered around secondary and tertiary care providers; lack of infrastructure for testing at primary care level Lack of R&D expenditure on diagnostics for new diseases e.g. Avian flu, chicunguniya Continued reliance on imported products and low competition from domestic players 15
  16. 16. Top Growth Opportunities : Malaysia Clinical Diagnostics Market Opportunities in laboratory automation in the hospital and pathology Clinical laboratory sectors for greater reliability, precision and cost efficiencies : Chemistry total lab automation, automated analyzers, automated pre and post analytical processes 0 Fastest growing clinical diagnostics sector in APAC : CAGR ~ 18% Molecular Diagnostics Market is driven by growth in biomarkers for cardiovascular diseases & oncology. 0 Diagnostics for Partnerships and alliances to commercialize newly developed Infectious diagnostics for diseases such as: tuberculosis, HIV, malaria, dengue, Diseases H1N1 Source: Frost & Sullivan. 16
  17. 17. Asia Pacific Life sciences and Health IT Market* Interoperability challenges hinder adoption Lifesciences & Healthcare IT, US$ Bn, 2009-2012 Market Drivers 80 CAGR Operational efficiency 70 7% Strong and sustained demand for healthcare 62.5 58.4 services 60 54.6 50.6 Consumer demand for quality and access to 50 Rest of the information 52.7 World 40 43.5 46.7 49.6 APAC 30 20 CAGR Market Restraints 10 11.3% 7.1 7.9 8.8 9.8 0 Interoperability 2009 2010 2011 2012 Integration 14.5% APAC Share 15.7% Lack of skilled resources *Healthcare IT includes: Software, Hardware, IT services and Lifesciences IT Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan 17
  18. 18. Malaysia Health IT Market Government focus on improved healthcare delivery Health IT Revenues, US$ Mn, 2009-2012 Market Drivers Emphasis on improved patient care , decision making and reduced medical errors Need for efficient data management, cost effective work flow processes Thrust on medical tourism Market Restraints Absence of well defined standards and reforms i.e. HIPAA Inadequate end user compliance to rapidly changing technology *Health IT includes: Software, Hardware, IT services, Networking 18
  19. 19. Top Growth Opportunities : Malaysia Health IT Market Spending on core clinical applications 2010 : ~ US$ 10 mn; CAGR : 23.6% Healthcare IT 0 Software, Spending on departmental systems 2010 :~ US$ 17mn; CAGR : ~18.9% Hardware & Growing need for hardware and systems integration and consulting services with continued Services investments in clinical applications and departmental systems ERP, Malaysia market 2010 (backoffice ERP) : ~US$ 35 mn; CAGR ~7.5% SCM Systems Demand from new and current hospitals, clinics, specialty centers 0 Malaysia’s 2020 Multi-Media Super Corridor project aims to enhance healthcare standards Healthcare like HL7,SNOMED,ICD10 with telemedicine and medical informatics as crucial components Standards Funds allocated to expand tele-Health and tele-consultation services, sharing of health records and setting up a National Health Informatics Center 0 Source: Frost & Sullivan. ERP : Enterprise Resource Planning SCM : Supply Chain Management 19
  20. 20. APAC Medical Imaging Market Turnkey projects drive double digit growth in Asia Imaging Market Revenues, US$ Bn, 2009-2012 Market Drivers 40 Rise in turnkey projects 35 30 CAGR Increasing corporate wellness programs 6% 25 22.3 23.6 Rest of Integration of Imaging with information 19.8 21 the World 20 systems 14.6 15 15 13.8 14.2 APAC 10 CAGR Market Restraints 12.7% 5 7.7 8.6 6 6.8 0 New customer sets to be addressed 2009 2010 2011 2012 Price erosion Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan 20
  21. 21. Malaysia Medical Imaging Market Focus on digitization Medical Imaging Revenues, US$ Mn, 2009-2012 Market Drivers • Move towards digitized solutions to enhance workflow efficiency •Increased wellness awareness encourages private health screening • Malaysia is destination of choice for patients from Islamic nations seeking medical services Market Restraints • Price erosion • Inability to adapt to rapid technology changes hinders adoption and usage •Long purchase process prolongs replacement cycle (mainly public sector) *Health IT includes: Software, Hardware, IT services, Networking 21
  22. 22. Top Growth Opportunities : Malaysia Medical Imaging Market Malaysia PACS market 2010 : ~US$ 5.6 mn; CAGR ~ 12% Focus on PACS as institutions continue to integrate Imaging with IT and 0 transition to Digital Radiology Systems to enhance workflow efficiency, PACS patient throughput and patient care Launch of new products; PACS vendors expand in Malaysia Malaysia market 2010 : ~US$ 3.1 mn; CAGR ~9.4% Digital Imaging Both private and public hospitals move towards digitized solutions, (CR /DR/CAD ) creating opportunity for digital radiology solutions 0 APAC market 2010: ~US$ 1.6 bn; CAGR ~11% Penetration of entry level PET/CT Mammography Continued efforts by College of Radiology to increase breast cancer awareness 0 Source: Frost & Sullivan. 22
  23. 23. Malaysia Healthcare Services Market Opportunity in Healthcare Real Estate Market IMPACT DRIVER TYPE OF DEMAND Private Public 2010 - 2012 2013 - 2015 2016 + Medical tourism General & Specialty Hospitals √ High High High Medical Suites √ Changing Disease Specialty Centres/ Hospitals √ √ High High High Pattern Rising Life Expectancy Long-term Care Facilities √ Medium Medium High Specialty Centers/ Hospitals √ √ Geriatric Centers Health General & Specialty Hospitals √ √ Low Medium High insurance & its coverage Primary care Facilities √ √ Government policy Medical teaching institutions √ √ High High Medium and/ or Universities General & Specialty Hospitals Primary Clinics √ √ 23
  24. 24. Malaysia Healthcare Services Market Opportunity in Healthcare Real Estate Market Projected Valuation Trend for Malaysian Projected Valuation Trend for Malaysian Private Private Hospitals (2007 - 2010) Clinics (2007 - 2010) 1000 948.5 Rental Income Rental Value HCRE Value (USD Million) 900 845.4 (USD Millions) Growth % 800 749.0 690.2 10 8.8% 700 8.66% 600 8 8.6% 500 400 6 8.3% 4.90 8.4% 4.38 300 3.54 3.92 4 8.1% 8.2% 200 100 2 8.0% 0 0 7.8% 2007 2008 2009 2010 Year 2007 2008 2009 2010 Year Rental Value Rental Value Growth Note: Market valuation for private hospitals include maternity and nursing homes, and are based on the annual reports provided by the hospital owners, and estimated value per bed. Valuation for clinics is based on the average commercial shop houses rates and assumptions within the cluster locations. 24
  25. 25. AGENDA 1. Overview of Healthcare Market : Key Takeaways 2. In-depth Sectoral Analysis APAC 3. Summary : Best Opportunity Analysis APAC and Malaysia 25
  26. 26. Where to place your bets in 2010- 2012 : APAC and Malaysia S.Korea Vaccines/ China Biologics India Vietnam Malaysia POCT/Self Monitoring Singapore Silver Industry/ Generics CV, Orthopedic Healthcare Services Oncology Growth Molecular Value based Endoscopy Diagnostics Imaging APAC EMR/ Wellness EHR Products Malaysia INNOVATION SUPER NORMALISATION LEADERSHIP TRIGGER GROWTH Time Source: Frost & Sullivan. 26
  27. 27. Thank You 27
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