Diagnostic World Asia - APAC IVD Outlook 2010

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  • Global: Pharmaceuticals/biotech comprises 70% of market with lowest growth rate LS/Health IT with highest growth rate (2010) APAC Medical Imaging at 36% of global market Pharma at 25% of global market. LS/HIT only 8% of global market 2009- apac is 23% 2010- 24% 2012 2010- pharma – 25% of global market 2012- 29% Devices- 24% of global market 26% Imaging- 32% 36% LS/HT is 8% of global market 9.4% Diagnostics 18% 19%
  • Global: Pharmaceuticals/biotech comprises 70% of market with lowest growth rate LS/Health IT with highest growth rate (2010) APAC Medical Imaging at 36% of global market Pharma at 25% of global market. LS/HIT only 8% of global market 2009- apac is 23% 2010- 24% 2012 2010- pharma – 25% of global market 2012- 29% Devices- 24% of global market 26% Imaging- 32% 36% LS/HT is 8% of global market 9.4% Diagnostics 18% 19%
  • Global: Pharmaceuticals/biotech comprises 70% of market with lowest growth rate LS/Health IT with highest growth rate (2010) APAC Medical Imaging at 36% of global market Pharma at 25% of global market. LS/HIT only 8% of global market 2009- apac is 23% 2010- 24% 2012 2010- pharma – 25% of global market 2012- 29% Devices- 24% of global market 26% Imaging- 32% 36% LS/HT is 8% of global market 9.4% Diagnostics 18% 19%
  • Drivers Total laboratory automation is favored by large hospital – Hub & Spoke Model, Faster response time Increased US$age of home care monitoring devices for blood pressure, and blood glucose monitoring as patient volume rises Early Detection- Increased pressure from reimbursement and government to move towards preventative healthcare- early cancer detection. Challenges Different cUS$tomer sets- R&D, Hospitals etc Allignment of payors, etc: Backend and front end integration of system is yet to be achieved Price Pressures_Increase competition with local Asian company that copied MNC products. Key Take Aways Sample Management- Collection, Storage will take back seat to other challenges like Volume Optimisation and Transport. IT-Data Management Tools (applications) need to be developed to transmit the information to newly developed web portal tools like EMR, PHR etc Incorporation of IT will be the new bUS$iness model
  • Micro renewables
  • PSA testing is very cheap and cuts the prostate cancer testing market. Second is the platform
  • Given their wide spectrum of research aims and multiple complex workflows, users of drug discovery technologies continuously drive demand for reagents and consumables. However, challenges associated with niche applications (e.g. ChIP-Sequencing) potentially slow consumption.
  • Diagnostic World Asia - APAC IVD Outlook 2010

    1. 1. Opportunities and Growth Strategies for the APAC IVD Industry
    2. 2. Contents Diagnostics Industry Briefing Industry Best Practices and Growth Strategies 360 Degree Global Perspective 3. 2. 1. APAC Market Outlook
    3. 3. Setting the Scene Outlook for Healthcare Industry from 2010-12 Source: Frost & Sullilvan ,2010 ) Global Healthcare Market : 2009 <ul><li>US and Europe were impacted in a major way by global crisis </li></ul><ul><li>Asia also slowed down but not as much as the West </li></ul><ul><li>Valuations were low and M&A was high, many smaller Biotech companies struggled </li></ul><ul><li>Major organizational restructuring occurred, along with portfolios being reassessed </li></ul>Global Healthcare Market : 2010-12 <ul><li>Recovery of the markets to a large extent with strong growth in Asia </li></ul><ul><li>Start of major patent expiries </li></ul><ul><li>M&A activity down in the West but could be important in Asia, restructuring will continue </li></ul><ul><li>Asia becoming increasingly important as a market and outsourcing hub </li></ul><ul><li>5Ps to drive market: Preventive, Preemptive, Personalized, Predictive, Personal Responsibility </li></ul>
    4. 4. Global vs. APAC: The New Frontier By 2012 APAC expected to be close to 27% of global market Source: Frost & Sullilvan ,2010 ) 23.9% 27.2% 23.2% 26.4% CAGR 12.2% CAGR 6.47% <ul><li>By 2015 APAC could represent ~40% of global market! </li></ul>Source: Frost & Sullivan Rest of the World APAC Global & APAC Healthcare Revenues US$ Bn, 2009-2012
    5. 5. Asia is however transitioning Moving toward a Multi–Polar World Order Source: Frost & Sullilvan ,2010 ) Asia Pacific Market : 2009 <ul><li>Slowing down of GDP in mature markets – Japan and Australia took a big hit </li></ul><ul><li>Global consolidation left a difficult mess for integration on a local level – job losses and portfolio realignment </li></ul><ul><li>Price cutting and playing the margins game </li></ul><ul><li>Slow down for Medical Tourism </li></ul><ul><li>Asia started to set up infrastructure for offshoring and outsourcing for US/EU companies </li></ul>Asia Pacific Market : 2012 <ul><li>A shift in the center of the world economically and strategically to Asia </li></ul><ul><li>Asia to move from export led development to consumption led growth </li></ul><ul><li>APAC the fastest growing pharma market and API production hub </li></ul><ul><li>Increased government attention to primary and community based healthcare . </li></ul><ul><li>Focus on building infrastructure and education: government role will be higher </li></ul><ul><li>Increased use of mobile technology in healthcare service delivery </li></ul>
    6. 6. APAC Clinical Diagnostics Marke t Shift in business model from instrumentation to service revenues Note: All figures are rounded; the base year is 2009. Source: Frost and Sullivan Market Drivers Market Restraints <ul><li>Lab automation </li></ul><ul><li>Home care monitoring </li></ul><ul><li>Emphasis on early detection </li></ul><ul><li>High cost of genomics and proteomics tests </li></ul><ul><li>Mutually exclusive target customers </li></ul><ul><li>Reimbursement issues </li></ul>APAC Share CAGR 7.3% CAGR 6% 17.8% 18.5% Clinical Diagnostics Revenues, US$ Bn, 2009-2012
    7. 7. Molecular Diagnostics POCT SMBG Top Growth Opportunities : APAC Clinical Diagnostics Market <ul><li>APAC POCT market 2010 : ~US$ 539 mn; CAGR ~10.8% </li></ul><ul><li>POCT testing focused on cardiac and diabetes care in secondary settings </li></ul><ul><ul><ul><ul><li>APAC SMBG market 2010 : ~US$ 1.7 bn; CAGR ~10.9% </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Focus on growing Asian ageing population and prevalence of diabetes </li></ul></ul></ul></ul>Source: Frost & Sullivan. <ul><li>0 </li></ul><ul><li>0 </li></ul><ul><li>APAC Molecular Diagnostics market 2010: ~US$ 700 mn; CAGR ~18%. </li></ul><ul><li>Driven by rise in cancer, STD, thyroid disorder and other autoimmune diseases </li></ul>
    8. 8. Contents Diagnostics Industry Briefing Industry Opportunities and Growth Strategies 360 Degree Perspective 3. 2. 1. APAC Market Outlook
    9. 9. Global Perspective <ul><li>Reference Labs and CROs Expand Services to Developing Countries. </li></ul><ul><li>Increased R&D Outsourcing by Pharma & Biotech Companies </li></ul><ul><li>Earlier Launch of Diagnostic Tests in the Asian/European Markets </li></ul><ul><li>Changing Global Trends Drive Adoption of New Technologies. </li></ul><ul><li>Funding opportunities, primary customer base and research strengths are differentiated in the APAC region </li></ul>GLOBAL Political & Regulatory Emerging Opportunities Cultural CEO
    10. 10. REFERENCE LAB TESTING EXPANDING TO DEVELOPING WORLD Advanced Markets Reference labs based in the U.S.,such as Quest Diagnostics Inc., are looking for high growth Asian markets India India has growing middle class with increasing buying power and demand for better healthcare services. China China has a growing aging population and increasing healthcare spending. India, China and S. Korea have some of the highest growth rates for healthcare spending in APAC and along with the growing aging population and middle class, represent attractive markets for clinical testing. Additionally, the increased prevalence of lifestyle diseases such as diabetes, cardiovascular diseases, and certain cancers contributes to the increasing need of testing. U.S. based national reference laboratories have already taken the lead to expand into these growing markets. Global expansion of clinical lab testing is likely to be influenced by innovation, cost and readiness of the countries. Reference Labs Expand Services to Developing Countries
    11. 11. Pharma and Biotech Companies Laboratory Information Management Systems (LIMS) High Data Output Consolidation and Standardization of LIMS Outsource to Multiple CROs Extended Sample Management Independent Functional Modules Sample Management Application Integration Quality Assurance Competency Management Inventory Management Increased R&D Outsourcing by Pharma and Biotech Companies
    12. 12. Earlier Launch of Diagnostic Tests in the Asian Markets 2008 Test Development Asian/E.U. Launch 2012 U.S. Market Launch LEARNING, KNOW-HOW FROM TESTS LAUNCHED IN ASIA/EU CAN EXPEDITE FDA CLEARANCE AND U.S. LAUNCH 2011 2013 U.S. Diagnostics assay development done at a U.S. R&D facility is likely to benefit from clinical data generated from use of tests in APAC countries. India Large market, low operating costs, and excellent local skills allow for low set up costs and ease of technology adoption leading to high revenues. China Tests launched in China and clinical data generated from them can be used to improve standardization of tests.
    13. 13. Changing Global Trends Drive Adoption of New Technologies Increasing Lifespan Manufacturers must take advantage of the changing global trends and collaborate with regional distributors to expand their presence in developing world. Primary Care 2010 Home Care/Self Testing/POC 2020 Global Healthcare Reduced Healthcare Costs Increase in Global Distribution Early Diagnosis Adoption of New Technologies <ul><li>Privatization, growth in number of hospitals and health insurance activities fuel demand from emerging markets, china, India and Eastern Europe. </li></ul><ul><li>Growing advancements in minimally invasive surgery and same day interventions create demand for faster turnaround times and more point-of –care tests. </li></ul><ul><li>Rising patient awareness and disease management initiatives in developing countries create demand for novel technologies. </li></ul>KEY GLOBAL TRENDS
    14. 14. Australia and Malaysia encouraging private sector research Genomics Hot-spots Oncology Hot-Spots Manufacturers should invest in implementation and provide multiple financing options Increased implementation of new technologies requires more training programs and streamlining workflow Low manufacturing costs in APAC increases pricing competition within Western countries Differentiated Funding Opportunities, Primary Customer Base and Research Strengths in the APAC Region Shape Implementation Strategies Australia Japan Singapore Korea Singapore and Korea are building up strong government supported public sector research
    15. 15. Integrated Industry Perspective <ul><li>Key Areas Spurs Integration of Pharmaceutical and Diagnostic Companies </li></ul><ul><li>Incorporation of Information Technology is the New Business Model. </li></ul><ul><li>The vertical alignment trend in the healthcare sector is affecting the clinical diagnostic sector as well, and will strongly impact the healthcare industry as a whole. </li></ul>Fluctuating Raw Material Levels Material Costs Maintain Capital Supplier Relationships CEO INTEGRATED INDUSTRY Secure Capital
    16. 16. Integration of Pharmaceutical and Diagnostic Companies is the Next Move Target Qualification Compound Screening Lead Optimization Pharma/tox Analysis Clinical Phase FDA Post-Market Assay Launch $9.5 Million-------------$14.5 Million------------$12.0 Million-----------$ 40Million Diagnostic/Device R&D Costs (U.S.) 2008, ~$40 million/Test Average Drug Development Cost = $1.2 Billion/ drug Average Diagnostic Development Cost = $40 million/test Four areas that will integrate pharmaceutical and diagnostic manufacturers are pharmacogenomics, development of biomarker assays, comprehensive disease management programs and more applied, focused clinical trials Biomarker Identification Assay Development FDA Standardization & Validation Tech-Platform Optimization
    17. 17. Incorporation of Information Technology is the New Business Model 2010 Next Generation Integrated Systems 2015 Broader Data Management Tools Patient Support Tools Web Portals to EHR Systems Electronic Management of Sample Transport Reduced Cost of Logistics Essential Part of Clinical Diagnostics Business Shareable Personal Health Records
    18. 18. The Vertical Alignment in the Healthcare Sector Impacts Clinical Diagnostics Diagnostic Labs Hospital and Clinics Healthcare Insurance Company Vertical Alignment Interoperability Healthcare Insurance Company Hospital and Clinics Diagnostic Labs Increasing Opportunities for Suppliers and IT Infrastructure Providers Diagnostic Labs Hospital and Clinics Healthcare Insurance Company
    19. 19. Technology Perspective <ul><li>Clinical Sample Management Will Take Center Stage. </li></ul><ul><li>Non-invasive Testing and Pre-natal diagnostics Will be High Priority </li></ul><ul><li>Changing market demands from R&D Sites </li></ul>New Applications Disruptive Technologies TECHNOLOGY Emerging Technology CEO
    20. 20. Clinical Sample Management Will Take Center Stage Efficient storage systems to aid test outsourcing Use of non-invasive Collection methods With degree of sophistication in clinical sample handling, clinical diagnostics will witness growth in developing countries Use of chemical techniques to store samples Use of nanofluidics to improve workflow Use of non-invasive collection methods Clinical Sample Volume optimization Transportation Storage Collection
    21. 21. Non-invasive Testing and Prenatal Diagnostics Drive Growth Microarray MIcrofluidics/ Nanodiagnostics Non-invasive technologies <ul><li>Biomarker Discovery </li></ul><ul><li>Improved Sample Management and Workflow </li></ul><ul><li>Point-of-Care Diagnostics </li></ul><ul><li>Low Cost Multiplexing Capabilities </li></ul><ul><li>Prenatal Genetic Testing </li></ul>Technologies Thrust Areas Microarray MIcrofluidics/ Nanodiagnostics Non-invasive technologies
    22. 22. Current Market Scenario Future Market Scenario Changing Market Demands from R&D Sites Faster, Easier, Automated Automation Multiplex Lab-On-Chip Integration Fragment Based Manual Handling Immunoassays Large Footprints High Throughput Screening Stand-alone
    23. 23. Economic Perspective <ul><li>Impact of Economic Downturn </li></ul><ul><li>Increase in M&A Activities </li></ul>ECONOMIC Country Risk Economic Trends & Issues Economic Threats Economic Trends CEO
    24. 24. Under-developed Economies Access to clinical testing facilities is a big challenge. More emphasis on developing easy to use cheaper POC tests. Emerging Economies (BRIC) Growing middle-class population with better income and access to private insurances have increasing purchasing power Developed Economies Keen in developing state-of-the art market tests. Less budgetary constraints for new technologies Diverse Global Economies Impact Product Development and Marketing Strategies EQUILIBRIUM BETWEEN COST EFFECTIVENESS AND CLINICAL EVIDENCE WILL BE A PRIMARY ECONOMIC DRIVER FOR NEW PRODUCT DEVELOPMENT AND ADOPTION.
    25. 25. Test Kit Providers (Diagnostic Companies) Sample Processing Platform Manufacturers Test Service Providers (Laboratories) Molecular Diagnostics Integrated test kit and platform development Novel molecular test development Quest Diagnostics Licenses Epigenetic Biomarker for Prostate Cancer from Epigenomics Inc to Develop and Market the Diagnostic Test Beckman Coulter to Acquire Lab Based Diagnostics Business from Olympus Corporation Increase in M&A Activities Impacts Market Dynamics
    26. 26. Competitive Perspective <ul><li>Diagnostic Potential of New Diseases Increases Competition. </li></ul><ul><li>Vendors Offer Competitive Workflows </li></ul>In-Direct Competition Competitive Strategy Competitive Benchmarking Emerging Competition COMPETITIVE CEO
    27. 27. Diagnostic Potential of New Diseases Increases Competition 2012 Multiplex Detection Panels for Cancer Differentiated Product Development 2005 2011 Increasing Competition 2020 Target miRNAs important in cell differentiation Multiplex Detection Panels for Cardiac and Diabetes Increasing Diagnostic Tests Differentiate between Chronic & Life Style Diseases BENCH BED SIDE
    28. 28. Vendors Offer Complete Workflows to Remain Competitive Validation Workflow Technologies Validation Strategies to Fill Workflow Challenges Benefits Large up-front costs, Quality disparities Mergers & Acquisitions Maintain ‘best-in-class’ rep <ul><li>RNAi </li></ul><ul><li>Antisense oligonucleotides </li></ul><ul><li>Mimics and inhibitors </li></ul><ul><li>shRNA </li></ul>Sample Preparation Functional Analysis <ul><li>Sample collection </li></ul><ul><li>Nucleic acid purification </li></ul><ul><li>Protein purification </li></ul><ul><li>Automated liquid handling </li></ul><ul><li>Microarray </li></ul><ul><li>Multiplex assay </li></ul><ul><li>Sequencing </li></ul><ul><li>High content screening </li></ul><ul><li>Cell based assays </li></ul>Detection and Quantification Analysis <ul><li>qRT-PCR </li></ul><ul><li>ELISA </li></ul><ul><li>Mass spectrometry </li></ul><ul><li>Western blotting </li></ul>Revenues sharing Alliances Align with top provider Large R&D costs In-house Development Easy integration
    29. 29. Customer Perspective <ul><li>Types of testing in Hospital and Physician Owned Labs </li></ul><ul><li>R&D Sites Prefer Walk Away Solutions </li></ul>CEO CUSTOMER Non Customer Demo- graphics Behavior Competitor’s Customers
    30. 30. Endocrinologists, Family practitioners & Internists are leading adopters of these testing methods in POLs OB/GYN, Pediatricians, and Cardiologists are leading in adoption for pregnancy, infectious disease, and coagulation tests, respectively FOBT and urinalysis are commonly used in many specialties 0% 20% 40% 60% 80% 100% Glucose handheld meters HbA1c Cholesterol/Lipid Chemistry analyzers Immunoassay analyzers Drugs of Abuse rapid test kits Infectious Disease rapid test kits Pregnancy/Fertility rapid test kits Hematology analyzers Hemostasis Coagulation systems Cardiac Biomarkers Fecal Occult Blood Tests Urinalysis systems The current utilization pattern of tests in physician office laboratories illustrates high utilization for glucose handheld meters, fertility test kits, fecal occult blood tests, and urinalysis systems. Hospital and Physician-owned Laboratories Lead Routine Testing Percentage of Physicians Utilizing Test Utilized Testing by Physician Specialty Internal Medicine Pediatrics OB/GYN Family Practice/GP Cardiology Endocrinology Test Types
    31. 31. Ease-of-use features and technology integration are critical for customer satisfaction in the fast-paced and demanding end-user community for drug discovery technologies. R&D Sites Prefer Easy-to-use Walk-away Solutions Secondary Reason for Satisfaction Primary Reason for Satisfaction   Top Reasons for Satisfaction (% of respondents, N=298) Genomic Technology Usefulness/ relevance to research Easy to use High accuracy Well integrated with existing technologies High specificity/ selectivity PCR/Thermal cycling 21 43 5 7 12 Gel Based (Northern/ Southern) 16 28 16 4 11 Multiplex assay 16 6 15 4 3 qPCR/RT-PCR 24 15 20 3 28 CE sequencing 14 14 23 6 8 Next Generation sequencing 20 13 13 13 -- Microarray 28 14 6 10 7 Automated liquid handling 10 6 6 12 4 SMD platforms 20 15 20 10 20 DNA/RNA isolation & purification 19 29 5 6 2 RNA interference 47 15 6 6 16 Transfection 33 38 2 9 3
    32. 32. Contents Diagnostics Industry Briefing Industry Opportunities and Growth Strategies 360 Degree Perspective 3. 2. 1. APAC Market Outlook
    33. 33. Opportunities in the Clinical Diagnostics Market Infancy Early Growth Late Growth Maturity Bubble size indicates the relative projected revenues of different segments in Yr 2010 Market Age Vs. CAGR of Diagnostics Market (Global), 2006-2010. <ul><li>The market growth of Molecular diagnostics is driven by the Majority of population with Sexually transmitted diseases, growing popularity of Thyroid & other Autoimmune diseases, Usage of molecular tests in drug discovery clinical trials and Need for quantitative, real-time monitoring of viral loads. </li></ul><ul><li>Technological advancement in whole blood analyzer would spur the growth in coagulation/Hemostasis market. </li></ul><ul><li>Most of the segments are expected to grow fairly due to emerging focus on preventative medicines in Asia. </li></ul>
    34. 34. Growth Opportunity Spectrum - Clinical Lab Testing Technology Trigger Crest of Inflated Expectations Depression of Expectations Educated Decision-making Product Maturity Pharmacogenomics Companion Diagnostics Cancer Testing Point-of-care Testing Genetic Testing Infectious Disease Testing Cardiac Biomarker Testing Reference Laboratory Services Autoimmune Testing Drugs of Abuse Testing Glucose Testing Fertility Testing Cholesterol Testing Hematology Testing Customer Expectations High Growth 14+ percent Medium Growth 7-14 percent Low Growth <7 percent
    35. 35. Response from Service Providers
    36. 36. Focus by Disease Areas
    37. 37. Technology Trigger Crest of Inflated Expectations Depression of Expectations Educated Decision-making Product Maturity ELISA Next Generation Sequencing Microfluidic Chip Technology Capillary Electrophoresis DNA Sequencing Nucleic Acid Isolation and Purification DNA Microarray Automated Liquid Handling Protein Interaction Analysis Technology Protein Arrays High Content Screening and Analysis Multiplex Assay Technology Cell Culture Proteomics Sample Preparation Protein Electrophoresis Western Blotting Cell Based Assays RNAi Technology MicroRNA Technology Growth Opportunity Spectrum - Research & Development Testing High Growth 14+ percent Medium Growth 7-14 percent Low Growth <7 percents Declining Market
    38. 38. 2/3 1/3 Technology Compliance Legislative Compliance Growth Strategy – R&D Testing Academic and Govt. Labs Pharma/Biotech Companies Clinical Labs Limited equipment funds Mostly unlimited equipment funds Very limited equipment funds Price often directs purchases Large account bargaining power Seek reagent rental programs
    39. 39. Growth Strategies- Research & Development Testing Estimated Revenue by Product Mix for Select Drug Discovery Technologies Companies (2008) Aggregate Product Mix for Select Drug Discovery Technologies Companies (2008) Instrumentation 33.8% Reagents & Consumables 66.2% Technology applications that require excessive optimization slow the “burn rate” of high-profit reagents and consumables. Moreover, complex workflows with excessive optimization often necessitate technology centralization, which further limits reagents and consumables-related business.
    40. 40. Critical Success Factors for the Diagnostics Industry
    41. 41. Value system Educate Integrate Innovate Invest To provide cost effective solution To gain competitive edge To frame winning strategies To create brand loyalty Best Practice (1) Durable Competitive Advantage Drives Growth New Technology meets a market need and value 􀂅 Reduction in mortality rates 􀂅 Reduction in disease burden 􀂅 Reduction in disease management cost Invest in technology to develop cost effective scalable solutions with high robustness Develop innovative esoteric tests with high clinical relevance for existing diseases Integrate novel tests with existing platforms to provide comprehensive test menu Provide educational awareness to promote novel predictive tests
    42. 42. Patient Focused Productivity Improvement Strategies Integrative Systems Biology Integrative Workflow Technologies Enhance Customer Base Clinical Research Best Practice (2) Durable competitive advantage through integrated approach Proteomics Transcriptomics Genomics InfoTech Metabolomics Bio Statistics Molecular Biology
    43. 43. Thank You!

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