Convergent medical technologies are reshaping industry landscape
Anyone who comes into the MaRS Centre would notice the large “Convergence Innovation” banner in the Atrium of MaRS. Convergence occurs when multiple products come together to form one product with the advantages of all of them. The benefits of such an approach are most striking in medical technologies: by providing multiple and complementary modes of action, these convergent products have the potential to offer greater therapeutic benefits than the individuals components. New classes of products, such as implantable glucose sensors, scaffolds covered with growth factors to promote bone regeneration and, a classic example, stents coated with pharmaceuticals are already multi-billion-dollar industries.
These new solutions have only become possible in recent years simply because we know more and have the computing power to find answers faster. For example, the discovery of gene-based molecular markers for expression profiling and target identification have transformed the diagnostic industry from a low-margin vertical that no VC would invest in, into a hot space fueled by new capital and M&A.
A few examples:
Some surveys suspect that ~30% of new medical products come as a result of convergence between engineering, biology, physics and chemistry. As is often the case, advances in technology are forcing changes in the way health care products are created, regulated and provided to patients. In other words, convergent technologies create convergent business practices.
For example, from the regulatory perspective, these type of products are considered ‘combination products’.. The need to regulate combination products has forced FDA’s nearly autonomous component centres to work with one another in ways that could not have been imagined a decade ago . See this life sciences blog for a discussion of the IP and regulatory issues patents in their design.
Development, manufacturing and distribution of combination products call for a cross-section of expertise that rarely resides within one company. For these reasons, development and commercialization of combination products is probably one of the main growth drivers for the leading firms (J&J, Medtronic, Boston Scientific) and a strong force reshaping the landscape of health care industry.
Veronika Litinski provides advisory services to entrepreneurs and high growth companies, with a special focus on life sciences markets, specializing in corporate finance and business development. See more…